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The Harleysville Manufacturing Shop produces motorcycle parts. Typically, 10 pieces out of a job lot of 1,000 parts are spoiled. Costs are assigned at the inspection point, P50.00 per unit. Spoiled pieces may be disposed of at P10.00 per unit. The spoiled goods must be inventoried appropriately when the normal spoilage is detected. Job 101 requires the production of 2,500 good parts.
Problem 1: Which of the following journal entries would be correct if the spoilage occurred due to specifications required for Job 101?
Option a. Work-in-Process Control P100Materials Control P100
Option b. Materials Control P100Work-in-Process Control P100Option c. Materials Control P250Work-in-Process Control P250Option d. Work-in-Process Control P250Materials Control P250
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