Paradise Bay Shop manufactures golf carts. In the previous month, a total of 33 units were...

 

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Paradise Bay Shop manufactures golf carts. In the previous month, a total of 33 units were started, and 3 spoiled units were detected upon completion. All 3 spoiled units are assumed to be normal spoilage. Costs assigned prior to the inspection point are $1,300 per unit. The spoiled units are checked into inventory at the disposal price of $215. a. What is Paradise Bay's normal spoilage rate for the month? b. Prepare the journal entries assuming the following: i. The spoilage is related to a specific job ii. The spoilage is common to all jobs iii. The company decides the spoilage is abnormal 4. The Russell Company has an extensive job-costing facility that uses a variety of metals. Answer each of the following questions, independently. a. Russell uses a specific metal alloy scrap that is not used in any specific job. Assume that scrap is immaterial in amount and sold, on account, for $480 directly after it is produced. Record the journal entry. b. Job 372 creates scrap metal that can be used by many different jobs. No physical record of the scrap is maintained by job. Russell only accounts for scrap at the time of sale. This period, scrap totaling $4,500 is sold for cash. Record the journal entry. c. Job 372 creates scrap metal that can be used by many different jobs. The scrap, totaling $4,500, is returned to the storeroom after production. One month later, the scrap is reused as direct materials on a subsequent job. Prepare the two journal entries for this situation. Paradise Bay Shop manufactures golf carts. In the previous month, a total of 33 units were started, and 3 spoiled units were detected upon completion. All 3 spoiled units are assumed to be normal spoilage. Costs assigned prior to the inspection point are $1,300 per unit. The spoiled units are checked into inventory at the disposal price of $215. a. What is Paradise Bay's normal spoilage rate for the month? b. Prepare the journal entries assuming the following: i. The spoilage is related to a specific job ii. The spoilage is common to all jobs iii. The company decides the spoilage is abnormal 4. The Russell Company has an extensive job-costing facility that uses a variety of metals. Answer each of the following questions, independently. a. Russell uses a specific metal alloy scrap that is not used in any specific job. Assume that scrap is immaterial in amount and sold, on account, for $480 directly after it is produced. Record the journal entry. b. Job 372 creates scrap metal that can be used by many different jobs. No physical record of the scrap is maintained by job. Russell only accounts for scrap at the time of sale. This period, scrap totaling $4,500 is sold for cash. Record the journal entry. c. Job 372 creates scrap metal that can be used by many different jobs. The scrap, totaling $4,500, is returned to the storeroom after production. One month later, the scrap is reused as direct materials on a subsequent job. Prepare the two journal entries for this situation.

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SOLUTION Paradise Bay Shop a The normal spoilage rate can be calculated as follows Normal Spoilage R... View the full answer