(Job order costing; rework) Michaels Rigging manufactures pulley systems to cus¬ tomer specifications and uses a job order system. A recent order from Barnett Company was for 10,000 pulleys, and the job was assigned number BA468. The job cost sheet for #BA468 revealed the following:

Final inspection of the 10,000 pulleys revealed that 230 of the pulleys were defective. In correcting the defects, an additional $950 of cost was incurred ($250 for direct material and $700 for direct labor). After the defects were cured, the pulleys were included with the nondefective units and shipped to the customer.

a. Assuming the rework costs are normal but specific to this job, show the journal entry to record incurrence of the rework costs.

b. Assuming the company has a predetermined overhead rate that includes nor¬ mal rework costs, show the journal entry to record incurrence of the rework costs.

c. Assuming the rework costs are abnormal, show the journal entry to record incurrence of the rework costs.LO1

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Direct material Direct labor Overhead Total WIP JOB #BA468 $20,400 24,600 18,400 $63,400