Bluefish Machine Shop Is a Manufacturer of Motorized Cars for Golf

question 19

Essay

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 2015.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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Definitions:

Variance

A measure of the dispersion or spread of a set of data points around their mean value; it quantifies the degree to which these points differ from the mean.

Distribution Plans

Strategies or policies set by a company or organization for delivering goods or services to customers, encompassing logistics, transportation, and channels of distribution.

Initial Setup Costs

The expenses incurred during the setting up of a new business, project, or system before it is operational.

Economic Condition

The state of a country or region in terms of the production and consumption of goods and services and the supply of money.