Question 1. What is the total amount that should be debited to Spoiled Goods Inv
ID: 2554444 • Letter: Q
Question
Question 1. What is the total amount that should be debited to Spoiled Goods Inventory if spoilage (100 tops) was related to customization in Job 9501?
Question 2. If the spoilage is not unique to Job 9501, what's the amount that should be entered for Spoiled Goods Inventory?
Question 3. If the spoilage (100 tops) is not unique to Job 9501, what's the amount that should be entered for MOH?
Question 4. If the spoilage (100 tops) is not unique to Job 9501, what's the amount that should be entered for WIP?
Question 5. What's the amount that should be entered for Loss from abnormal spoilage?
Question 6. 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?
Spoiled Goods Inventory
MOH
WIP
Loss on abnormal spoilage
Problem C part of Job 9501. Amounts charged to Job # 9501 for the month: Direct materials $24,000; Direct labor $6,000; 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 69.95 Seconds sales price per top $15.95Explanation / Answer
1): Amount should be debited to Spoiled Goods Inventory, if 100 tops Spoilage (Related to Customization in Job 9501)
No. of Top Spoilage: 100
Second sales price per top: $15.95
Hence, (100 top*$15.95) i.e. $1595 will be debited to Spoiled Goods Inventory.
2): Amount should be entered to Spoiled Goods Inventory, if 100 tops Spoilage ( Not Unique to Customization)
No. of Top Spoilage: 100
Second sales price per top: $15.95
Hence, (100 top*$15.95) i.e. $1595 will be debited to Spoiled Goods Inventory.
3): Amount should be entered for MOH, if 100 tops Spoilage ( Not Unique to Customization)
No. of Top Spoilage: 100
Loss per Top: $23.05/Top
Hence, (100 top*$23.05) i.e. $2305 will be debited to MOH.
4): Amount should be entered for MOH, if 100 tops Spoilage ( Not Unique to Customization)
No. of Top Spoilage: 100
Cost per Top: $39.00/Top
Hence, (100 top*$3900) i.e. $3900 will be Entered as WIP.
Working Note For calculation of Loss on 100 Top
Direct Material
$24,000.00
Direct Labour
$6,000.00
Manufacturing Overhead
$48,000.00
Total Manufacturing Cost
$78,000.00
Order Size
2000.00
Cost/Top ($144000/8000)
$39.00
Less: Second Sales Price/Top
$15.95
Loss per top Sold as Second
$23.05
Number of of Top Sold as Second
100
Total Loss on 100 top Sold as Second
$2,305.00
Working Note For calculation of Loss on 100 Top
Direct Material
$24,000.00
Direct Labour
$6,000.00
Manufacturing Overhead
$48,000.00
Total Manufacturing Cost
$78,000.00
Order Size
2000.00
Cost/Top ($144000/8000)
$39.00
Less: Second Sales Price/Top
$15.95
Loss per top Sold as Second
$23.05
Number of of Top Sold as Second
100
Total Loss on 100 top Sold as Second
$2,305.00
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