Previously provided information: Jellyfish Machine Shop is a manufacturer of mot
ID: 2446840 • Letter: P
Question
Previously provided information:
Jellyfish Machine Shop is a manufacturer of motorized carts for vacation
resorts.
Patrick Cullin, the plant manager of Jellyfish, obtains the following information for Job #10 in August
2014. A total of 46 units were started, and 6 spoiled units were detected and rejected at final inspection,
yielding 40 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the
inspection point are $1,100 per unit. The current disposal price of the spoiled units is $235 per unit. When
the spoilage is detected, the spoiled goods are inventoried at $235 per unit.
New Infomartion and Question:
Assume that the 6 spoiled units of Jellyfish Machine Shop’s Job #10 can be reworked for a total cost of $1,800. A total cost of $6,600 associated
with these units has already been assigned to Job #10 before the rework.
Prepare the journal entries for the rework, assuming the following:
a. The rework is related to a specific job.
b. The rework is common to all jobs.
c. The rework is considered to be abnormal.
Explanation / Answer
Date
Title of Account
Debit
Credit
Case (a)
Work-in-Progress (Job #10)
1800
Total cost
1800
Case (b)
Manufacturing Overhead Control
1800
Total cost
1800
Case (c)
Loss from Abnormal Rework
1800
Total cost
1800
Date
Title of Account
Debit
Credit
Case (a)
Work-in-Progress (Job #10)
1800
Total cost
1800
Case (b)
Manufacturing Overhead Control
1800
Total cost
1800
Case (c)
Loss from Abnormal Rework
1800
Total cost
1800
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