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Bluefish Machine Shop is a manufacturer of motorized cars for golf clubs. Leona Pez, the...

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Accounting

Bluefish Machine Shop is a manufacturer of motorized cars for golf clubs. Leona Pez, the plant manager of Bluefish, obtained the following information for Job #99 in July 2018. A total of 50 units were started, and 3 spoiled units were detected and rejected at final inspection. The spoiled units were considered to be normal spoilage. Costs prior to the inspection point are $1,200 per unit. The current disposal price of the spoiled units is $600 per unit. When spoilage is detected, the spoiled units are inventoried at $600 per unit.

Required:

1. Prepare journal entries to record the normal spoilage, assuming:

a. The spoilage is related to a specific job.

b. The spoilage is common to all jobs.

c. The spoilage is considered to be abnormal spoilage.

2. Assume that 2 spoiled units can be reworked for a total cost of $800. A total cost of $2,400 associated with these units has already been assigned to job #99 before the rework. Prepare journal entries for the rework assuming:

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.

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