Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Textbook Question
Chapter 18, Problem 18.41P
Rework in
Required
Prepare the journal entries for the rework, assuming the following:
- a. The rework is related to a specific job.
- b. The rework is common to all jobs.
- c. The rework is considered to be abnormal.
18-40 Spoilage in job costing. Jellyfish Machine Shop is a manufacturer of motorized carts for vacation resorts.
Patrick Cullin, the plant manager of Jellyfish, obtains the following information for Job #10 in August 2017. A total of 46 units were started, and 6 spoiled units were detected and rejected at final inspection, yielding 40 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 $235 per unit. When the spoilage is detected, the spoiled goods are inventoried at $235 per unit.
- 1. What is the normal spoilage rate?
Required
- 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.
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Students have asked these similar questions
Rework in job costing, journal entry (continuation of 18-40). Assume that the 6 spoiled units of Jellysh Machine Shop’s Job #10 can be reworked for a total cost of $1,800. A total cost of $6,600 associated with these units has already been assigned to Job #10 before the rework.
In job costing, the journal entry to record $200 of depreciation expense on factory
equipment for the current period involves which of the following?
credit to manufacturing overhead for $200
debit to depreciation expense-factory equipment for $200
debit to manufacturing overhead for $200
debit to accumulated depreciation-factory equipment for $200
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 bult to customer specifications). O'Leary uses a normal job costing system. Direct labor at O'Leary Iis
pald $26 per hour, but the employees are not pald 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.
Skipped
Year 1
Year 2
Direct labor-hours worked
68, 800
55,800
Manufacturing overhead costs incurred
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$2,832,000
1,032,000
Employee benefits
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837,000
558, 000
540, 000
688,000
Power
645, eee
Heat and light
Supervision
Depreciation
141,600
661,650
2,036, 580
s05, 250
141,600
781,470
2,036,500
Property taxes and insurance
787,430
Total…
Chapter 18 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (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....
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