Question

E18-32 (similar to) Question Help Barrett Kitchens produces a varlety of items in accordance with specal job orders from hospitals, plant cafetelas, and unlversity dormitcries. An order for 3,000 cases of mixed vegetables costs $11 per case: direct materals, $6 direct manufacturing labor, S3; and manufacturing overhead allocated, $2. The manufacturing overhead rate includes a provision for normal spollage, Conslder each requirement independently. Read the requirements. Requirement 1. Assume that a laborer dropped 300 cases. Suppose part of the 300 cases could be sold to a nearby prison for S300 cash. Prepare a journal entry to record this event. Calculate and explain briefly the unit cost of the remaining 2,700 cases. (Abbreviatians used: Mfg. -Manufacturing, Pay. -Payable. Reoord debis rt Prepare a joumal entry to record this event. Requirements Journal Entry Accounts Debit Credit 1. Assume that a laborer dropped 300 cases. Suppase part of the 300 cases could be sold to a nearby prison for $300 cash. Prepare a joumal entry to record this event. Calculate and explain briefly the unit cost of the remaining 2,700 cases. 2. Refer to the original data. Tasters at the company reject 300 of the 3,000 cases. The 300 cases are disposed of for $600. Assume that this rejection rate is conaidered normal. a. Prepare a joumal entry to record this event, and calculate the unit cos: if the rejection is attributable t o exacting specifications of this b. Prepare a joumal entry to record this event, and calculate the unit cost if the rejection is characteristic of the production process and is not attributable to this specific job c. Are unit costs the same in requirements 2a and 2b? Explain your reasoning briefly 3. Refer to the original data. Tasters rejected 300 cases that had insufficient salt. The product can be placed in a vat, salt can be added, and the product can be reprocessed into jars. This operation, which is considered normal, will cost $300 a. Prepare a journal entry to record this event, and calculate the unit cost of all the cases if this additional cost was incurred because of the exacting specifications of this partioular job b. Prepare a journal entry to record this event, and calculate the unit cost of all the cases if this I cost occurs regularly because of diffi cuity in seasoning. c. Are unit costs the same in requirements 3a and 3b? Explain your reasoning briefly Choose from any list or enter any number in the input fields and then click Check Answer. PrintDone 11 Femaining Clear All

Answer 1

1		Journal Entry
	Date	Account Title	Debit-$	Credit-$	W.N
		Cash	300		Calculation of abnormal Loss
		Loss from abnormal spoilage	3000		Abnormal Loss	(No of units sold *cost per unit)-SP
		W.I.P control		3300		(300*11)-300
		to record abnormal loss				3000
	The unit cost of the remaining cases will remain $11 per case.Since the cost of
	the remaining cases is not affected by the loss from abnormal spoilage.
2-a	Journal Entry for recording sale of scrap
	Date	Account Title	Debit-$	Credit-$	W.N
		Cash	600		Calculation of cost if the rejection is attributable to a particular job
		Manufacturing OH Control		600	Cost of the remaining good cases	Total Cost-Spoilage realized
		to record sale of scrap				11*3000-600
						32400
					Calculation of the per unit cost of good
					per unit of good cases	Cost of Good Cases/No of Good Cases
						32400/3000-600
						13.5
b	Date	Account Title	Debit-$	Credit-$
		Cash	600
		Manufacturing OH Control	2700
		W.I.P Control		3300
		to record sale of scrap
	The unit cost of the good case remains at $11 if the rejection is not attributable to a particular job.
c	In 2a normal spoilage have been charged as cost of job having exact job specifications however in 2b normal spoilage
	is not considered as particular attribute of the job hence leading to a difference in unit cost in 2a and 2b
3-a		Journal Entry
	Date	Account Title	Debit-$	Credit-$	Calculation of cost if the rejection is attributable to a particular job
		W.I.P Control	300		Cost of the remaining good cases	Total Cost+ Additional Cost
		Manufacturing OH Control		300		(11*3000+300)
		to record W.I.P control is the material control ,wages control				33300
	Thus cost of the remaining good cases is $33300				Calculation of unit cost of goods
					Unit cost of good cases	Cost of Good Cases/No of Good Cases
b	Date	Account Title	Debit-$	Credit-$		33300/3000
		Manufacturing OH Control	300			$11.10
		Manufacturing OH allocated		300
		to record the manu OH control ,the material control and wages control
	Thus the unit cost of good cases remains at $11 per case if the additional cost occurs regularly because of
	difficulty in seasoning.
c	In 3a normal rework cost have been charged to job having exact job specification however in 3b normal rework
	Is not considered as a particular attribute of this job because of production process hence also leading to a difference
	in unit costs in 3a and 3b