Question 1. What\'s the amount that should be entered for Loss from abnormal spo

Question

Question 1. What's the amount that should be entered for Loss from abnormal spoilage?

Question 2. 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? What's the amount for these four items?

Spoiled Goods Inventory   

MOH   

WIP   

Loss on abnormal spoilage

In August, Builick sold the material for $1,050 cash.

Question: What's the journal entry to record the sale of the material in August?

[Select ["Cash", "Scrap Inventory", "WIP", "MOH", "Gain on sale of scrap", "Loss on sale of scrap"]   ] ["Debit", "Credit"] 1,050

[ Select   ["Cash", "WIP", "MOH", "Scrap Inventory", "Gain on sale of scrap", "Loss on sale of scrap"]  ] ["Debit", "Credit"] 50

[ Select   ["Cash", "WIP", "MOH", "Scrap Inventory", "Gain on sale of scrap", "Loss of sale of scrap"] ] [ "Debit", "Credit"] 1,000

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 $15.95

Explanation / Answer

Question 1:

Direct materials

24000

Direct labour

6000

MOH

48000

Total costs

78000

Production quantity

2000

Per top cost

Assuming total spoilage is 200 tops

Then abnormal spoilage (78000 x 50/2000)

50 tops

1950

Question 2:

General journal

Debit

Credit

Abnormal loss (78000 x 200/2000)

7800

Cost of goods sold

7800

(Being abnormal loss incurred)

Profit and loss account

7800

Abnormal loss (78000 x 200/2000)

7800

(Being abnormal loss transferred to PL )

Spoiled goods inventory

Cost

7800

Sale price (200 x 15.95)

3190

Lower of the two shall be the value of inventory

3190

MOH (48000 x 200/2000)

4800

WIP

0

Loss on abnormal spoilage

Abnormal loss

7800

Less: Sale price recovered

3190

Loss on abnormal spoilage

4610

Since the resale value of $1000 is already recorded thus, $1050 shall be recorded by debiting cash with corresponding gain on sale for $50.

Question 1:

Direct materials

24000

Direct labour

6000

MOH

48000

Total costs

78000

Production quantity

2000

Per top cost

Assuming total spoilage is 200 tops

Then abnormal spoilage (78000 x 50/2000)

50 tops

1950

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