Defective work LO₄ Gates Mfg. Company manufactures an integrated transistor circuit board for 4 repeat customers but also accepts special orders for the same product. Job No. MSI incurred the following unit costs for 1,000 circuit boards manufactured:

Materials $5.00 Labor 2.00 Factory overhead 2.00 Total cost per unit $9.00 When the completed products were tested, 50 circuit boards were found to be defective. The costs per unit of correcting the defects follow:

Materials $3.00 Labor 1 .00 Factory overhead 1 .00 Record the journal entry for the costs to correct the defective work:

a. If the cost of the defective work is charged to factory overhead.

b. If the cost of the defective work is charged to the job.

E2-I3 JIT and cost control (Appendix)

LO₅ A-Rod Industries produces 10,000 units each day and the average number of units in work in process is 40,000.

1. Determine the throughput time.

2. If the same daily output can be achieved while reducing the work in process by 60%, determine the new throughput time.