Recording spoiled and defective goods. The Fairbanks Machine Company produced 4,000 units on Job 218 at a unit cost of $55 each. On September 8, 19X7, it is found that 60 units have defects and have an estimated sales value of only $34 each.

Instructions Use the account names found in your textbook to do the following:

1.

a. Assume that the units are spoiled. Prepare the general journal entry to record the estimated market value of the rejected units. Assume that the spoilage costs are to be charged to Manufacturing Overhead Control.

b. Compute the unit cost of the remaining finished units.

2.

a. Prepare the general journal entry to record the estimated market value of the rejected units. Assume that the spoilage costs are to be absorbed in the cost of the specific job.

b. Compute the unit cost of the remaining finished units.

3. Assume that the units are defective instead of spoiled. Prepare the general journal entry to record the total rework costs of $585. Also assume that Job 229 is assigned to the necessary rework. The rework is completed on September 8, and the rework costs are to be charged to Manufacturing Overhead Control.