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. Assume that the 3 spoiled units of Paradise Bay Shop's Job #22 can be reworked for a total cost of $2,200. A total cost of $3,900 associated with these units has already been assigned to Job #22 before the rework. Requirements: 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.
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. Assume that the 3 spoiled units of Paradise Bay Shop's Job #22 can be reworked for a total cost of $2,200. A total cost of $3,900 associated with these units has already been assigned to Job #22 before the rework. Requirements: 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.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter2: Accounting For Materials
Section: Chapter Questions
Problem 15P: One of the tennis rackets that Ace Sporting Goods manufactures is a titanium model (Slam) that sells...
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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. Assume that the
3
spoiled units of
Paradise Bay
Shop's Job
#22
can be reworked for a total cost of
$2,200.
A total cost of
$3,900
associated with these units has already been assigned to Job
#22
before the rework. Requirements:
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.
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