Quiz #9 Chapter 19_Process costing of Spoilage, Rework, and Scrap
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Algonquin College *
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310
Subject
Industrial Engineering
Date
Jan 9, 2024
Type
xlsx
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3
Uploaded by CaptainFlowerWildcat35
Total globes manufactured
25,000 Globes rejected as spoiled units
850 Total manufacturing cost
$ 1,250,000 Assume the spoiled units have no disposal value.
The unit cost of making 25,000 globes is $ 50 The total cost of the 850 spoiled units is
$ 42,500 The increase in the per unit cost of goods sold as a result of normal spoilage is $ 1.76 Loss from Abnormal Spoilage
42,500 Work-in-Process Control
42,500 Sunshine Toys manufactures globes at its San Fernando facility. The company provides you with the following information regarding operation for April:
Required 1.
What is the unit cost of making the 25,000 globes?
Required 2.
What is the total cost of the 850 spoiled units?
Required 3.
If the spoilage is considered normal, what is the increase in the unit cost of good globes manufactured as a result of the spoilage? (Round your answer to the nearest cent.)
Required 4.
If the spoilage is considered abnormal, prepare the journal entries for the spoilage incurred.
(Record debits first, then credits. Exclude explanations from any journal entries.)
Units of normal spoilage
/
Total good units completed
=
Normal spoilage
6
/
24
=
25%
Materials Control
1,200 Work-in-Processs Control (Job #10)
1,200 *Personal understanding: Related to a specific job, the spoilage units are turning back to materials
Manufacturing Overhead Control
5,700 Materials Control
1,200 Work-in-Process Control (Job #10)
6,900 Loss from Abnormal Spoilage
5,700 Materials Control
1,200 Work-in-Process Control (Job #10)
6,900 Paradise Bay Cart Shop is a manufacturer of motorized carts for vacation resorts. Patrick Cullin, the plant manager of Paradise Bay, obtains the following information for Job #10 in August. A total of 30 units were started, and 6 spoiled units were detected and rejected at final inspection
, yielding 24 good units
. The spoiled units were considered to be normal spoilage
. Costs assigned prior to the inspection point are $1,150 per unit
. The current disposal price of the spoiled units is $200 per unit
. When the spoilage is detected, the spoiled goods are inventoried at $200 per unit
.
Required 1.
What is the normal spoilage rate? Select the formula, and then calculate the normal spoilage rate. (Round the percentage to the nearest tenth percent, X.X%.)
*Personal understanding is Goods started -> started to manufacture, but in the end, Good units completed ->
sold. Normal spoilage rate = Goods are not good / Goods sold
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. (Record debits first, then credits. Exclude explanations from any journal entries. Leave unused cells blank.)
a.
The spoilage is related to a specific job.
b.
The spoilage is common to all jobs.
*Personal understanding: Common to all jobs, which means the cost of normal spoilage units is a part of the manufacturing overhead cost; the residual value of the spoilage units counted as materials back to inventory
c.
The spoilage is considered to be abnormal spoilage.
*Personal understanding: Abnormal spoilage, which means the cost of normal spoilage units is a loss; the residual value of the spoilage units counted as materials back to inventory
e rate
> Goods
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