Job costing, scrap. The Wong Corporation makes two different types ofhubcaps for cars—mod¬

els HM3 and JB4. Circular pieces of metal are stamped out of steel sheets (leaving the edges as scrap), formed, and finished. The stamping operation is identical for both types of hubcaps.

During March, Wong manufactured 20,000 units of HM3 and 10,000 units ofJB4. In March, manufacturing costs per unit ofHM3 and JB4 before accounting for the scrap are as follows:

HM3 JB4 Direct materials $12.00 $18.00 Direct manufacturing labour 3.60 4.80 Materials-related manufacturing overhead

(materials-handling, storage, etc.) 2.40 3.60 Other manufacturing overhead 7.20 9.60 Unit manufacturing costs $25.20 $36.00 Materials-related manufacturing costs are allocated to products at 20% of direct mate¬

rials costs. Other manufacturing overhead is allocated to products at 200% of direct manufac¬

turing labour costs, fiince the same metal sheets are used to make both types of hubcaps, Wong maintains no records of the scrap generated by the individual products, ficrap gener¬

ated during manufacturing is accounted for at the time it is returned to the storeroom as an offset to materials-related manufacturing overhead. The value of scrap generated during March and returned to the storeroom was $8,400.

Required 1. Prepare a journal entry to summarize the accounting for scrap during March.

2. $uppose the scrap generated in March was sold in April for $8,400. Prepare a journal entry to account for this transaction.

' \ 3. What adjustments, if any, would you make for scrap when calculating the manufacturing

\ cost per unit for HM3 and JB4 in March? Explain.