Concept explainers
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.
Want to see the full answer?
Check out a sample textbook solutionChapter 18 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
- 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.arrow_forwardRequired: 1. Calculate the per-unit cost of Jobs 78 and 79. Round your answers to the nearest cent. Job 78 per unit Job 79 per unit 2. Compute the ending balance in the work-in-process inventory account. Round your answer to the nearest cent. 3. Prepare the journal entries reflecting the completion of Jobs 78 and 79 and the sale of Job 79. The selling price is 140 percent of cost. Round your answers to the nearest cent. Completion of Jobs 78 & 79 Sale of Job 79 (cost) Sale of Job 79 (sale)arrow_forwardTrue/false 1) Activity-based costing information is recorded on a job sheet each month which is later posted to the general ledger at the end of the year. ________ 2. A factory production manager’s salary is considered an organizational sustaining activity cost. ________ 3. First stage allocation is the process by which overhead costs are assigned to activity cost pools in an activity-based costing system. ________ 4. Interviewing operating-level managers is a poor way of determining cost pools in first-stage allocation. ________ 5. Production accountants applying activity rates to cost pools in activity-based costing will be able to calculate standard costs. ________ 6. The process of budgeting often takes place during the process of evaluation. ________ 7. Preparation of the cash budget often precedes the preparation of the sales budget. ________ 8. The self-imposed budget is the same as a top-down budget. ________ 9. The Chief Executive Officer of a corporation…arrow_forward
- Budgeted production costs: Materials P150,000 100,000 200,000 P450,000 Direct labor Overhead Total Budgeted overhead activities: Budgeted Cost Activities Cost Driver Base hours Engineering hours Number of Setups P40,000 1,000 600 Engineering Machine setup Material handling Inspection Total 30,000 50,000 5,000 80,000 4,000 inspection P200,000 setups No. of material moves moves Number of inspectionsarrow_forwardLifestyle Roofing uses job order costing and applies manufacturing overhead too individual projects using predetermined overhead rates. In the Installation Division, overhead is applied on the basis of direct labour hours, and in the Disposal Division, overhead is applied on the basis of debris tonnage hauled to the landfill. At the beginning of the current year, management made the following budget estimates to determine overhead application rates. Annual Estimates Direct labor Manufacturing overhead Direct labor hours Tons of Debris 1 Job no. 652 (8,348 square-feet): Cost of material used on job Direct labor cost Direct labor hours Tons of debris Installation Disposal $750,000 $120,000 $100,000 $36,000 25,000 10,000 300 Job #652 for Bees Grocery measured 8,348 square-feet. The job was started and completed in May. Information pertaining to this project is provided below. Installation Disposal $30,000 $1,000 $7,800 $1,100 250 0 80 7 c. Prepare the journal entries required to record…arrow_forwarda. What are the costs of Jobs SY-400 and SY-403 at the beginning of the month and when completed? b. What is the cost of Job SY-404 at the end of the month? c. How much was under or over applied service overhead for the month?arrow_forward
- For a manufacturing entity using Job Order Costing, all non-direct manufacturing costs are captured in the asset account Factory Overhead (FOH). When a Job is completed, an estimate of the amount of FOH costs that should be applied to the completed job is allocated to the Job's WIP asset account. This step is done for each Job that is completed during the year and still in process at year-end. If the amount of FOH that is allocated during the year is not equal to the actual FOH costs incurred during the year, then at year-end, any balance left-over in the FOH account is "zeroed-out" and expensed. What is the proper journal entry (per GAAP) required to move ("zero-out") any balance in the FOH account at year-end?? (assume there is a $1,000 left-over DEBIT balance in the FOH account prior to this entry)arrow_forwardThe following information is from the materials requisitions and time tickets for Job 9-1005 completed by Great Bay Boats. The requisitions are identified by code numbers starting with the letter Q, and the time tickets start with W. At the start of the year, management estimated that overhead cost would equal 110% of direct labor cost for each job. Determine the total cost on the job cost sheet for Job 9-1005. Date Document Amount 7/1 Q-4698 $1,250 7/1 W-3393 600 7/5 Q-4725 1,000 7/5 W-3479 450 7/10 W-3559 300arrow_forwardThe following information is from the materials requisitions and time tickets for Job 9 completed by Great Bay Boats. Materials requisitions are identified by code numbers starting with the letter M, and the time tickets start with T. Estimated (applied) overhead for Job 9 is $1,400. Date July 1 July 1 July 5 July 5 July 10 Date Document M-46 T-33 M-47 T-34 T-35 Prepare a job cost sheet for Job 9, which includes costs for direct materials, direct labor, overhead, and total cost. July 1 July 5 July 10 Amount $ 1,700 1,050 1,450 900 750 Direct Materials Requisition Number Cost JOB COST SHEET: Job 9 Direct Labor Time-Ticket Number Cost Overhead Date July Cost Total Costarrow_forward
- Q: Determining job cost, using direct labor cost, direct labor hour,and machine hour methods?a. If the direct labor cost method is used in applying factory overhead and the predetermined rate is 100%, what amount should be charged to Job 2010 for factory overhead? Assume that direct materials used totaled $5,000 and that the direct labor cost totaled $3,200.b. If the direct labor hour method is used in applying factory overhead and the predetermined rate is $10 an hour, what amount should be charged to 2010 for factory overhead? Assume that the direct materials used totaled $5,000, the direct labor cost totaled $3,200, and the number of direct labor hours totaled 250.c. If the machine hour method is used in applying factory overhead and the predetermined rate is $12.50 an hour, what amount should be charged to 2010 for factory overhead? Assume that the direct materials used totaled $5,000, the direct labor cost totaled $3,200, the direct labor hours were 250 hours, and the machine…arrow_forwardExotic Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows: The average shop direct labor rate is 37.50 per hour. Determine the predetermined shop overhead rate per direct labor hour.arrow_forwardUse the space provided below to prepare six summary journal entries for the month of August. These entries record (1) cost of direct materials used, (2) cost of direct labor, (3) cost of applied overhead, (4) cost of jobs completed, (5) cost of goods sold, and (6) total sales on account. Then set up T-accounts for Work in Process, Finished Goods, Cost of Goods Sold, and Sales. Post the entries to the appropriate accounts and then balance each account. Finally, prepare a supporting schedule by job number showing the cost of ending work in process, finished goods, and cost of goods sold.arrow_forward
- Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage LearningManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
- Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningPrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College