for normal spoilage. Consider each requirement independently. Assume that a laborer dropped 420 cases. Suppose part of the 420 cases could be sold to a nearby prison for $420 cash. Prepare a journal entry to record this event. Calculate the unit cost of the remaining 1,680 cases.
for normal spoilage. Consider each requirement independently. Assume that a laborer dropped 420 cases. Suppose part of the 420 cases could be sold to a nearby prison for $420 cash. Prepare a journal entry to record this event. Calculate the unit cost of the remaining 1,680 cases.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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PROBLEM 3: Barrett Kitchens produces a variety of items in accordance with special job orders from hospitals, plant cafeterias, and university dormitories. An order for 2,100 cases of mixed vegetables costs $9 per case: direct materials, $4; direct manufacturing labor, $3; and manufacturing
- Assume that a laborer dropped 420 cases. Suppose part of the 420 cases could be sold to a nearby prison for $420 cash. Prepare a
journal entry to record this event. Calculate the unit cost of the remaining 1,680 cases. - Refer to the original data. Tasters at the company reject 420 of the 2,100 cases. The 420 cases are disposed of for $840. Assume that this rejection rate is considered normal. Prepare a journal entry to record this event, and do the following:
- Calculate the unit cost if the rejection is attributable to exacting specifications of this particular job.
- Calculate the unit cost if the rejection is characteristic of the production process and is not attributable to this job.
- Are unit costs the same in requirements 2a and 2b?
- Refer to the original data. Tasters rejected 420 cases that had insufficient salt. The product can be placed in a vat, salt can be added, and the product can be reprocessed into jars. This operation, which is considered normal, will cost $420. Prepare a journal entry to record this event and do the following:
- Calculate the unit cost of all the cases if this additional cost was incurred because of the exacting specifications of this particular job.
- Calculate the unit cost of all the cases if this additional cost occurs regularly because of difficulty in seasoning.
- Are unit costs the same in requirements 3a and 3b?
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