Paradise Bay Cart Shop is a manufacturer of golf carts. Peter Cranston, the plant manager of Paradise Bay Cart, obtains the following information for Job # 22 in August 2020. A total of 40 unit were started, and 8 spoiled units were detected and rejected at final inspection, yielding 32 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the ins are $1,100 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. Read the requirements. Requirement 1. What is the normal spoilage rate? Select the formula, then calculate the normal spoilage rate. (Round the percentage to the nearest tenth percent, X.X%.) = Normal spoilage rate % Requirement 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 spo considered to be abnormal spoilage. (Record debits first, then credits. Exclude explanations from any journal entries.) a. The spoilage is related to a specific job. Journal Entry Accounts b. The spoilage is common to all jobs. Journal Entry Accounts c. The spoilage is considered to be abnormal spoilage. Journal Entry Accounts Debit Debit Debit Credit Credit Credit
Paradise Bay Cart Shop is a manufacturer of golf carts. Peter Cranston, the plant manager of Paradise Bay Cart, obtains the following information for Job # 22 in August 2020. A total of 40 unit were started, and 8 spoiled units were detected and rejected at final inspection, yielding 32 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the ins are $1,100 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. Read the requirements. Requirement 1. What is the normal spoilage rate? Select the formula, then calculate the normal spoilage rate. (Round the percentage to the nearest tenth percent, X.X%.) = Normal spoilage rate % Requirement 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 spo considered to be abnormal spoilage. (Record debits first, then credits. Exclude explanations from any journal entries.) a. The spoilage is related to a specific job. Journal Entry Accounts b. The spoilage is common to all jobs. Journal Entry Accounts c. The spoilage is considered to be abnormal spoilage. Journal Entry Accounts Debit Debit Debit Credit Credit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Paradise Bay Cart Shop is a manufacturer of golf carts. Peter Cranston, the plant manager of Paradise Bay Cart, obtains the following information for Job # 22 in August 2020. A total of 40 units
were started, and 8 spoiled units were detected and rejected at final inspection, yielding 32 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 $200 per unit. When the spoilage is detected, the spoiled goods are inventoried at $200 per unit.
Read the requirements.
Requirement 1. What is the normal spoilage rate?
Select the formula, then calculate the normal spoilage rate. (Round the percentage to the nearest tenth percent, X.X%.)
= Normal spoilage rate
%
b. The spoilage
Requirement 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.)
a. The spoilage is related to a specific job.
Journal Entry
Accounts
common to all jobs.
Journal Entry
Accounts
c. The spoilage is considered to be abnormal spoilage.
Journal Entry
=
Accounts
Debit
Debit
Debit
Credit
O
Credit
Credit
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