Reference no: EM131672431

Question: Spoilage, journal entries. Plastique produces parts for use in various industries. Plastique uses a job-costing system. The nature of its process is such that management expects normal spoilage at a rate of 2% of good parts. Data for last month is as follows:

Production (units)                       10,000

Good parts produced                     9,750

Direct material cost/unit               $ 5.00

The spoiled parts were identified after 100% of the direct material cost was incurred. The disposal value is $2/part.

1. Record the journal entries if the spoilage was

(a) job specific or

(b) common to all jobs.

2. Comment on the differences arising from the different treatment for these two scenarios.