Normal spoilage rate, What is the normal spoilage

Normal spoilage rate

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Reference no: EM13918102

18-36 Spoilage in job costing. 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.

1. What is the normal spoilage rate?

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

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.

Reference no: EM13918102

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