Paradise Bay Shop is a manufacturer of golf carts. Peter Cranston, the plant manager of Paradise Bay, obtains the following information for Job # 22 in August 2020. A total of 23 units were started, and 3 spoiled units were detected and rejected at final inspection, yielding 20 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the inspection point are $1,300 per unit. The current disposal price of the spoiled units is $215 per unit. When the spoilage is detected, the spoiled goods are inventoried at $215 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 % Requirements 1. What is the normal spoilage rate? 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. - X

Paradise Bay Shop is a manufacturer of golf carts. Peter Cranston, the plant manager of Paradise Bay, obtains the following information for Job # 22 in August 2020. A total of 23 units were started, and 3 spoiled units were detected and rejected at final inspection, yielding 20 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the inspection point are $1,300 per unit. The current disposal price of the spoiled units is $215 per unit. When the spoilage is detected, the spoiled goods are inventoried at $215 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 % Requirements 1. What is the normal spoilage rate? 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. - X

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Paradise Bay Shop is a manufacturer of golf carts. Peter Cranston, the plant manager of Paradise Bay, obtains the following information for Job # 22 in August 2020. A total of 23 units were started, and 3 spoiled
units were detected and rejected at final inspection, yielding 20 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the inspection point are $1,300 per unit. The current
disposal price of the spoiled units is $215 per unit. When the spoilage is detected, the spoiled goods are inventoried at $215 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
%
Requirements
1. What is the normal spoilage rate?
2.
Prepare the journal entries to record the normal spoilage, assuming
the following:
The spoilage is related to a specific job.
a.
b. The spoilage is common to all jobs.
C.
The spoilage is considered to be abnormal spoilage.
X

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