Springfield Sign Shop Manufactures Only Specific Orders $\quad 3,000$

question 72

Essay

Springfield Sign Shop manufactures only specific orders.It uses a standard cost system.During one large order for the airport authority,an unusual number of signs were spoiled.The normal spoilage rate is 10% of units started.The point of first inspection is half way through the process,the second is three-fourths through the process,and the final inspection is at the end of the process.Other information about the job is as follows:
Signs started $\quad 3,000$
Signs spoiled $\quad450$

$\begin{array}{lr}\text { Direct materials put into process at beginning } & \$ 60,000 \\ \text { Conversion costs for job } & \$ 120,000 \\ \text { Standard direct material costs per sign } & \$ 27 \\ \text { Standard conversion cost per sign } & \$ 54 \\ \text { Average point of spoilage is the 3/4 completion point } & \\ \text { Average current disposal cost per spoiled sign } & \$ 15\end{array}$


Required:
Make necessary journal entries to record all spoilage.

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Definitions:

Abdomen

The part of the body between the chest and pelvis, containing digestive and other vital organs.

Cervix Dilation

The process of the cervix opening in preparation for childbirth.

Childbirth

The act of delivering a baby from the mother’s uterus to the outside world.

Expulsion

The act of being driven out or ejected from a place or institution, often as a consequence of one's behavior.