Production (units) Good parts produced Direct material cost/unit 10,000 9,750 $ 5.00 The spoiled parts were identified after 100% of the direct material cost was incurred. The disposal value is $2/part. 1. Record the journal entries if the spoilage was (a) job specific or (b) common to all jobs. 2. Comment on the differences arising from the different treatment for these two scenarios. Required

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Spoilage, journal entries. Plastique produces parts for use in various industries. Plastique uses a job-costing system. The nature of its process is such that management expects normal spoilage at a rate of 2% of good parts. Data for last month is as follows:

Production (units)
Good parts produced
Direct material cost/unit
10,000
9,750
$ 5.00
The spoiled parts were identified after 100% of the direct material cost was incurred. The disposal value is
$2/part.
1. Record the journal entries if the spoilage was (a) job specific or (b) common to all jobs.
2. Comment on the differences arising from the different treatment for these two scenarios.
Required
Transcribed Image Text:Production (units) Good parts produced Direct material cost/unit 10,000 9,750 $ 5.00 The spoiled parts were identified after 100% of the direct material cost was incurred. The disposal value is $2/part. 1. Record the journal entries if the spoilage was (a) job specific or (b) common to all jobs. 2. Comment on the differences arising from the different treatment for these two scenarios. Required
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