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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Chapter 18, Problem 18.27E
Spoilage,
| Production (units) | 10,000 |
| Good parts produced | 9,750 |
| Direct material cost/unit | $ 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.
Required
- 2. Comment on the differences arising from the different treatment for these two scenarios.
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The Peric Manufacturing Shop produces motorcycle parts. Typically, 12 pieces out of a job lot of 1,000 parts are spoiled. Costs are assigned at the inspection point, $40.00 per unit. Spoiled pieces may be disposed at $8.00 per unit. The spoiled goods must be inventoried appropriately when the normal spoilage is detected. The current job requires the production of 3,000 good parts.
Which of the following journal entries would be correct if the spoilage occurred due to specifications required for Job 101?
a. Dr. Work-in-Process Control 96; Cr. Materials Control 96
b. Dr. Materials Control 288; Cr. Work-in-Process Control 288
c. Dr. Work-in-Process Control 288; Cr. Materials Control 288
d. Dr. Materials Control 96; Cr. Work-in-Process Control 96
Jenny Company's Job No. 520 for the manufacture of 6,600 coats was completed December at the following unit costs: Direct materials - 1,500, Direct labor - 1,000, Factory overhead (including allowance of P50 for spoiled work) - 500. Total = 3,000. Final inspection of Job No. 520 disclosed 600 spoiled costs. These were subsequently sold to a jobber for 600,000. Assuming that spoilage loss is charged to all production, what would be the unit cost of the good coats produced per Job No. 520?
Burlington Textiles has some spoiled goods that had an assigned cost of $40,000 and zero net disposal value.
Prepare a journal entry for each of the following conditions under (a) process costing (department A) and (b) job costing:
1. Abnormal spoilage of $40,000
2. Normal spoilage of $40,000 regarded as common to all operations
3. Normal spoilage of $40,000 regarded as attributable to specifications of a particular job
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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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