Atlantae Corp. uses a job order costing system for client contracts related to custom-manufactured blinds. A customer recently ordered 15 blinds, and the job was assigned \#380. Information for Job \(\# 380\) revealed the following:

Final inspection of the blinds revealed that one was defective. In correcting the defect, an additional \(\$ 50\) of cost was incurred ( \(\$ 20\) for direct material and \(\$ 30\) for direct labor). After the defects were corrected, the blind was included with the other units and shipped to the customer. Assume no entry had been made for the \(\$ 50\) of rework costs.

a. Journalize the entry to record incurrence of the rework costs if Atlantae Corp.'s predetermined overhead rate includes normal rework costs.

b. Journalize the entry to record incurrence of the rework costs if rework is normal but specific to this job.

c. Journalize the entry to record incurrence of the rework costs, assuming that all rework is abnormal.

Transcribed Image Text:

Direct material ... $650 Direct labor... 800 Overhead. 700