Question 1. If the scrap material was generated in multiple jobs (and Builick re

Question

Question 1. If the scrap material was generated in multiple jobs (and Builick records the resale value at the time of production), which account should be credited for the $1,000 in revenue?

A. MOH

B. WIP

C. FG

D. Scrap revenue

Question 2. If the scrap material was specifically generated in Job 599 (and Builick records the resale value at the time of production), which account should be credited for the $1,000 in revenue?

A. MOH

B. WIP

C. FG

D. Scrap revenue

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

Question 3. 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

Question 4.  If the 80 defective units were found in multiple jobs worked on during the period, what account should be debited for the rework costs?

A. MOH

B. WIP

C. FG

D. Loss on rework

E. Accounts payable

Question 5.  If all 80 defective units were found in Job 11M, which account should be debited for the rework costs?

A. MOH

B. WIP

C. FG

D. Loss on rework

E. Accounts payable

Question 6.  What's the final cost per circuit board in Job 11M if the defects were not specifically related to the job?

Question 7.  What's the final cost per circuit board in Job 11M if the defects were specifically related to the job?

Problem A As part of manufacturing process, Builick Manufacturing often ended up with leftover material. During July, the company generated scrap material that could be sold for $1,000. This amount was considered significant. If the company records the resale value at the time of production,

Explanation / Answer

1. As the Scrap revenue cant be tracked against a particular unit it has to be credited to Manufacturing overhead account. So here the answer is Option A

2.As the scrap is trackable against a particular job it should be credited to that job that is finished goods so the answer is Option C

3..Dr Cash 1050

Cr MOH 1050

Note

Assumes that the scrap cannot be tracked against a single unit.

4. As it is normal and cant track against a specific job it has to be debited With MOH so option A.

5. As it is normal and traceable to a particular job it should be debited with the finished good inventory of that job so answer here is option C

6. For answering this question I need details MOH Absorption Rate.

7. Current cost for 920($1,000-80) good units =920*18= $16,560

Total Rduction in cost due to rework = 80*$4 = $320

Net total cost after Adjusting Rework cost = $16,560-$320= $16,240

Per unitcost for good unit will be = $16,240/920 = $17.65

Note

Assumes the inspectiondone on all 11 units.

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