Demski Technologies specializes in making surgical instruments. The firm closely collaborates with a German company that provides all of the needed technical expertise. The production process begins with a block of specially formulated, surgical-quality stainless steel. The instrument is formed after a number of operations to shape and trim the metal. The final step in the operation is to test each instrument for manufacturing and other defects.
Demski began July with zero instruments in process. During July, Demski began work on 4,000 instruments, completing 3,500 by month’s end. Demski estimates that the units still in process as of July 31 are 30% complete with respect to conversion costs.
Finally, Demski spent $600,000 on materials costs, $1,095,000 on conversion costs, and $612,500 on testing costs during July.

Required:
Prepare Demski’s process-costing report for July.