CM Designs manufactures sportswear.During the month, the company produced 2,000 tops aspart of Job 9501. Amounts charged
Question:
CM Designs manufactures sportswear.During the month, the company produced 2,000 tops aspart of Job 9501.
Amounts charged to Job # 9501 for the month: Direct materials $20,000; Direct labor $4,000; MOH $48,000
150 defective tops would be considered normal spoilage on a job of this size. Tops that don't meet quality standards are sold as "seconds".
Regular sales price per top $59.95
Seconds sales price per top $25.95
a.100 tops in the job did not pass quality control.What's the journal entry to record thespoilage if Job 9501 was a special order and the spoilage was related to customization?
Part a - What is the total amount that should be debited to Spoiled Goods Inventory if spoilage (100 tops) was related to customization in Job 9501?
b.What's the journal entry to record the spoilage if the issues causing the spoilage (100 tops) were not unique to Job 9501?
- Part b - If the spoilage is not unique to Job 9501, what'sthe amount that should be entered for:
Spoiled Goods Inventory
(Enter credit amounts with parentheses.Enter 0.00 if the account would not appear in the journal entry.)
- Part b -If the spoilage (100 tops) is not unique to Job 9501, what'stheamount that should be entered forMOH?
(Enter credit amounts inparentheses.Enter 0.00 if the account would not appear in the journal entry.)
- Part b-If the spoilage (100 tops) is not unique to Job 9501, what'stheamount that should be entered for WIP
(Enter credit amounts with parentheses.Enter 0.00 if the account would not appear in the journal entry.)
- Part b - Enter the amount that should be entered for:
Loss from abnormal spoilage
(Enter credit amounts with parentheses.Enter 0.00 if the account would not appear in the journal entry.)
c.Assume that 200 tops failed to meet quality control standards.How much should be charged to Loss from Abnormal Spoilage assuming all 200 tops could be sold at the $25.95 price? Spoilage was due to equipment malfunction (not related to the job).
Part c - Assume that 200 tops failed to meet quality control standards and spoilage was not related to the job.What's the journal entry to record the spoilage?
(Enter credits in parentheses.Enter 0.00 if no amount would be posted to the account.Use commas. No $. Two decimals.)
- Spoiled Goods Inventory
- MOH
- WIP
- Loss on abnormal spoilage
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura