Horngren's Cost Accounting, Student Value Edition (16th Edition)
16th Edition
ISBN: 9780134476032
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 18, Problem 18.34E
Scrap, job costing. The Russell Company has an extensive
- 1. Job 372 uses a particular metal alloy that is not used for any other job. Assume that scrap is material in amount and sold for $480 quickly after it is produced. Prepare the
journal entry .
Required
- 2. The scrap from Job 372 consists of a metal used by many other jobs. No record is maintained of the scrap generated by individual jobs. Assume that scrap is accounted for at the time of its sale. Scrap totaling $4,500 is sold. Prepare two alternative journal entries that could be used to account for the sale of scrap.
- 3. Suppose the scrap generated in requirement 2 is returned to the storeroom for future use, and a journal entry is made to record the scrap. A month later, the scrap is reused as direct material on a subsequent job. Prepare the journal entries to record these transactions.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The Russell Company has an extensive job-costing facility that uses a variety of metals. Consider each requirement independently.
Q. The scrap from Job 372 consists of a metal used by many other jobs. No record is maintained of the scrap generated by individual jobs. Assume that scrap is accounted for at the time of its sale. Scrap totaling $4,500 is sold. Prepare two alternative journal entries that could be used to account for the sale of scrap.
In job-order costing, all of the following statements are correct with respect to labor time and cost except:
Multiple Choice
time tickets are kept by employees showing the amount of work on specific jobs.
the job cost sheet for a job will contain all direct labor charges to that particular job.
labor cost that can be traced to a job only with a great deal of effort is treated as part of manufacturing overhead.
a machine operator performing routine annual maintenance work on a piece of equipment would charge the maintenance time to a specific
job.
Alvarez Manufacturing Inc. is a job shop. The management of Alvarez Manufacturing Inc. uses the cost information from the job sheets to assess cost performance. Information on the total cost, product type, and quantity of items produced is as follows:
Date
Job No.
Product
Quantity
Amount
Jan. 2
1
TT
520
$16,120
Jan. 15
22
SS
1,610
20,125
Feb. 3
30
1,420
25,560
Mar. 7
41
TT
670
15,075
Mar. 24
49
SLK
2,210
22,100
May 19
58
SLK
2,550
31,875
June 12
65
TT
620
10,540
Aug. 18
78
SLK
3,110
48,205
Sept. 2
82
1,210
16,940
Nov. 14
92
TT
750
8,250
Dec. 12
98
SLK
2,700
52,650
a. On your own paper, develop a graph for each product (three graphs), with Job Number (in date order) on the horizontal axis and Unit Cost on the vertical axis. Then, determine Alvarez Manufacturing Inc.'s cost performance over time for the three products. Round all answers to the nearest cent.
Job No.
Unit Cost
1
22
30
41
49
58
65
78
82
92
98
b. Where is the best place to look to investigate Alvarez Manufacturing's cost…
Chapter 18 Solutions
Horngren's Cost Accounting, Student Value Edition (16th Edition)
Ch. 18 - Why is there an unmistakable trend in...Ch. 18 - Distinguish among spoilage, rework, and scrap.Ch. 18 - Normal spoilage is planned spoilage. Discuss.Ch. 18 - Costs of abnormal spoilage are losses. Explain.Ch. 18 - What has been regarded as normal spoilage in the...Ch. 18 - Units of abnormal spoilage are inferred rather...Ch. 18 - In accounting for spoiled units, we are dealing...Ch. 18 - Total input includes abnormal as well as normal...Ch. 18 - Prob. 18.9QCh. 18 - The unit cost of normal spoilage is the same as...
Ch. 18 - In job costing, the costs of normal spoilage that...Ch. 18 - The costs of rework are always charged to the...Ch. 18 - Abnormal rework costs should be charged to a loss...Ch. 18 - When is a company justified in inventorying scrap?Ch. 18 - How do managers use information about scrap?Ch. 18 - Prob. 18.16MCQCh. 18 - Which of the following is a TRUE statement...Ch. 18 - Healthy Dinners Co. produces frozen dinners for...Ch. 18 - Fresh Products, Inc. incurred the following costs...Ch. 18 - Normal and abnormal spoilage in units. The...Ch. 18 - Weighted-average method, spoilage, equivalent...Ch. 18 - Weighted-average method, assigning costs...Ch. 18 - FIFO method, spoilage, equivalent units. Refer to...Ch. 18 - FIFO method, assigning costs (continuation of...Ch. 18 - Weighted-average method, spoilage. LaCroix Company...Ch. 18 - FIFO method, spoilage. 1. Do Exercise 18-25 using...Ch. 18 - Spoilage, journal entries. Plastique produces...Ch. 18 - Recognition of loss from spoilage. Spheres Toys...Ch. 18 - Weighted-average method, spoilage. LogicCo is a...Ch. 18 - FIFO method, spoilage. Refer to the information in...Ch. 18 - Standard-costing method, spoilage. Refer to the...Ch. 18 - Spoilage and job costing. (L. Bamber) Barrett...Ch. 18 - Reworked units, costs of rework. Heyer Appliances...Ch. 18 - Scrap, job costing. The Russell Company has an...Ch. 18 - Weighted-average method, spoilage. World Class...Ch. 18 - FIFO method, spoilage. Refer to the information in...Ch. 18 - Weighted-average method, shipping department...Ch. 18 - FIFO method, shipping department (continuation of...Ch. 18 - Physical units, inspection at various levels of...Ch. 18 - Spoilage in job costing. Jellyfish Machine Shop is...Ch. 18 - Rework in job costing, journal entry (continuation...Ch. 18 - Scrap at time of sale or at time of production,...Ch. 18 - Physical units, inspection at various stages of...Ch. 18 - Weighted-average method, inspection at 80%...Ch. 18 - Job costing, classifying spoilage, ethics....
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Alvarez Manufacturing Inc. is a job shop. The management of Alvarez Manufacturing Inc. uses the cost information from the job sheets to assess cost performance. Information on the total cost, product type, and quantity of items produced is as follows: a. Develop a graph for each product (three graphs), with Job Number (in date order) on the horizontal axis and Unit Cost on the vertical axis. Use this information to determine Alvarez Manufacturing Inc.s cost performance over time for the three products. b. What additional information would you require in order to investigate Alvarez Manufacturing Inc.s cost performance more precisely?arrow_forwardA machine shop manufactures a stainless steel part that is used in an assembled product. Materials charged to a particular jobamounted to 600. At the point of final inspection, it was discoveredthat the material used was inferior to the specifications required bythe engineering department; therefore, all units had to be scrapped. Record the entries required for scrap under each of the following conditions: a. The revenue received for scrap is to be treated as a reductionin manufacturing cost but cannot be identified with a specificjob. The value of stainless steel scrap is stable and estimatedto be 125 for this job. The scrap is sold two months later forcash at the estimated value of 125. b. Revenue received for scrap is to be treated as a reduction inmanufacturing cost but cannot be identified with a specificjob. A firm price is not determinable for the scrap until it issold. It is sold eventually for 75 cash. c. The production job is a special job, and the 85 received onaccount for the scrap is to be treated as a reduction inmanufacturing cost. (A firm price is not determinable for thescrap until it is sold.) d. Only 40 cash was received for the scrap when it was sold inthe following fiscal period. (A firm price is not determinablefor the scrap until it is sold, and the amount to be received forthe scrap is to be treated as other income.)arrow_forwardSan Mateo Optics, Inc., specializes in manufacturing lenses for large telescopes and cameras used in space exploration. As the specifications for the lenses are determined by the customer and vary considerably, the company uses a job-order costing system. Manufacturing overhead is applied to jobs on the basis of direct labor hours, utilizing the absorption- or full-costing method. San Mateos predetermined overhead rates for 20x1 and 20x2 were based on the following estimates. Jim Cimino, San Mateos controller, would like to use variable (direct) costing for internal reporting purposes as he believes statements prepared using variable costing are more appropriate for making product decisions. In order to explain the benefits of variable costing to the other members of San Mateos management team, Cimino plans to convert the companys income statement from absorption costing to variable costing. He has gathered the following information for this purpose, along with a copy of San Mateos 20x1 and 20x2 comparative income statement. San Mateo Optics, Inc. Comparative Income Statement For the Years 20x1 and 20x2 San Mateos actual manufacturing data for the two years are as follows: The companys actual inventory balances were as follows: For both years, all administrative expenses were fixed, while a portion of the selling expenses resulting from an 8 percent commission on net sales was variable. San Mateo reports any over-or underapplied overhead as an adjustment to the cost of goods sold. Required: 1. For the year ended December 31, 20x2, prepare the revised income statement for San Mateo Optics, Inc., utilizing the variable-costing method. Be sure to include the contribution margin on the revised income statement. 2. Describe two advantages of using variable costing rather than absorption costing. (CMA adapted)arrow_forward
- I need help solving this accounting problemarrow_forwardI need help with this.I think i have it most of the way but i know its not correct Please helparrow_forwardFrary Corporation is a building contractor. Frary tracks product costs in its job cost system and uses board feet to apply overhead to jobs. Frary has calculated an overhead rate of $61.52 per board foot and they have recorded the following information for job number E4641: Direct labor hours: 45 Direct labor rate: $17.14 Direct material: $5,784.00 Total board feet: 243 The total cost of job number E4641 is: Select one: A. $20,733.36 B. $6,555.30 C. $5,862.66 D. $9,323.70 E. $21,504.66arrow_forward
- Please help with the uncompleted (attached). Drawing a blank.arrow_forwardXYZ company uses a job-order costing system. In reviewing its records at the end of the year, the company has discovered that OMR 12,000 of raw materials has been drawn from the storeroom and used in the production of Job PS5, but that no entry has been made in the accounting records for the use of these materials. Job PS5 has been completed but it is unsold at year end. This error will cause: O a. Cost of Goods Sold to be overstated by OMR 12,000 for the year. O b. Cost of Goods Manufactured to be overstated by OMR 12,000 for the year. O C. None of the given answer is correct O d. Finished Goods to be overstated by OMR 12,000 at the end of the year. Work in Process to be understated by OMR 12,000 at Oe. year end. étv MacBook Airarrow_forwardNot sure what I am doing wrong. Please help.arrow_forward
- please answer d and e O’Leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to customer specifications). O’Leary uses a normal job costing system. Direct labor at O’Leary is paid $29 per hour, but the employees are not paid if they are not working on jobs. Manufacturing overhead is assigned to jobs by a predetermined rate on the basis of direct labor-hours. The company incurred manufacturing overhead costs during two recent years (adjusted for price-level changes using current prices and wage rates) as follows. Year 1 Year 2 Direct labor-hours worked 69,400 56,400 Manufacturing overhead costs incurred Indirect labor $ 2,856,000 $ 2,256,000 Employee benefits 1,041,000 846,000 Supplies 694,000 564,000 Power 651,000 546,000 Heat and light 142,800 142,800 Supervision 783,210 663,450…arrow_forwardXYZ company uses a job-order costing system. In reviewing its records at the end of the year, the company has discovered that OMR 12,000 of raw materials has been drawn from the storeroom and used in the production of Job PS5, but that no entry has been made in the accounting records for the use of these materials. Job PS5 has been completed but it is unsold at year end. This error will cause: a. Work in Process to be understated by OMR 12,000 at year end. O b. None of the given answer is correct С. Cost of Goods Sold to be overstated by OMR 12,000 for the year. O d. Cost of Goods Manufactured to be overstated by OMR 12,000 for the year. e. Finished Goods to be overstated by OMR 12,000 at the end of the year.arrow_forwardNote:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Job Costing and Spoilage | Topic 2 | Spoilage, Re-work, and Scrap; Author: Samantha Taylor;https://www.youtube.com/watch?v=VP55_W2oXic;License: CC-BY