18-40 Spoilage in job costing

1. What is the normal spoilage rate?

Units of normal spoilage

Normal spoilage rate (%) = x 100
Total good units completed

= (6 ÷ 40) x 100
= 0.15 x 100
= 15%

2. Prepare the journal entries to record the normal spoilage, assuming the following:
a. The spoilage is related to a specific job.

Spoiled Goods (6 units x $235 disposal price per spoiled unit) 1,410
Work-in-Process Control - Job #10 1,410

b. The spoilage in common to all jobs.

Spoiled Goods 1,410

Manufacturing Overhead Control 5,190
Work-in-Process Control - Job #10 6,600

c. The spoilage is considered to be abnormal spoilage.

Spoiled Goods 1,410

Loss from Abnormal Spoilage 5,190
Work-in-Process Control - Job #10 6,600
18-41 Rework in job costing, journal entry (continuation of 18-40)
1. Prepare the journal entries for the rework, assuming the following:
a. The rework is related to a specific job.

Work-in-Process Control - Job #10 1,800

Various Accounts 1,800

b. The rework is common to all jobs.

Manufacturing Overhead Control - rework costs 1,800

Various Accounts 1,800

c. The rework is considered to be abnormal.

Loss from Abnormal Rework 1,800

Various Accounts 1,800
18-42 Scrap at the time of sale or at time of production, journal entries (continuati
1. Prepare the journal entries for the recognition of scrap, assuming the following:
a. The value of scrap is immaterial and scrap is recognized at the time of sale.

Cash or Accounts Receivable 700

Scrap Revenues 700

b. The value of scrap is material, is related to a specific job, and is recognized at the time of sale.

Cash or Accounts Receivable 700

Work-in-Process Control - Job #10 700

c. The value of scrap is material, is common to all jobs, and is recognized at the time of sale.

Cash or Accounts Receivable 700

Manufacturing Overhead Control 700

d. The value of scrap is material, and scrap is recognized as inventory at the time of production
and is recorded at its net realizable value.

Materials Control 700

Work-in-Process Control - Job #10 700

Cash or Accounts Receivable 700

Materials Control 700
rnal entries (continuation of 18-40)

zed at the time of sale.

at the time of sale.

he time of production