Moreland Corporation manufactures bells and whistles. In June, 6,00 . bells were completed on Job Order No. BX46 . On final inspection, 400 bells were rejected and transferred to the spoiled goods inventory to be sold at $.50 each. Costs recorded on Job Order No. BX46 follow: Direct materials $2,400 Direct labor 2,100 Factory overhead 1,200 Prepare the journal entries to record the following:
a. Charges for materials, labor, and factory overhead for Job Order No. BX46
b. Cost of the spoiled work, the transfer of the cost of the good toys to Finished Goods, and the sale of the imperfect toys, if the loss on spoilage is charged to all jobs worked on during the period
c. Cost of the spoiled work, the transfer of the cost of the good bells to Finished Goods, and the sale of the imperfect ones, if the loss on spoilage is to be charged to Job Order No. BX46 only. (Round the new unit cost to the nearest whole cent, and assume part b, above, has not occurred.)
(a) Work in Process 5,700 .
Materials 2,400
Payroll (direct labor) 2,100
Factory Overhead 1,200
(b) Spoiled Goods (400 × $.50) 200 .
Factory Overhead 180
Work in Process (400 × $.95*) 380
Finished Goods ((6,00 . - 400 . × $.95) 5,320
Work in Process 5,320
Cash 200 .
Spoiled Goods 200
(c) Spoiled Goods 200 .
Work in Process 200
Finished Goods (5,600 × $.98*) 5,488
Work in Process 5,488
Cash 200 .
Spoiled Goods 200
* Cost per unit $5,700 / 6,00 . = $.95
** $5,700 - $200 = $.9821 rounded
5,600
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