42. (Job order costing; rework) Argonne Rigging manufactures pulley systems to customer specifications and uses a job order system. A recent order from Michaels 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 other good 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 normal 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.

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