Concept explainers
Rework in
Required
Prepare the journal entries for the rework, assuming the following:
- a. The rework is related to a specific job.
- b. The rework is common to all jobs.
- c. The rework is considered to be abnormal.
18-40 Spoilage in job costing. Jellyfish Machine Shop is a manufacturer of motorized carts for vacation resorts.
Patrick Cullin, the plant manager of Jellyfish, obtains the following information for Job #10 in August 2017. A total of 46 units were started, and 6 spoiled units were detected and rejected at final inspection, yielding 40 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the inspection point are $1,100 per unit. The current disposal price of the spoiled units is $235 per unit. When the spoilage is detected, the spoiled goods are inventoried at $235 per unit.
- 1. What is the normal spoilage rate?
Required
- 2. Prepare the journal entries to record the normal spoilage, assuming the following:
- a. The spoilage is related to a specific job.
- b. The spoilage is common to all jobs.
- c. The spoilage is considered to be abnormal spoilage.
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Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
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