18-36 Spoilage in job costing. Jellyfish Machine Shop is a manufacturer of motorized carts for vacation
resorts.
Patrick Cullin, the plant manager of Jellyfish, obtains the following information for Job #10 in August
2014. A total of 46 units were started, and 6 spoiled units were detected and rejected at final inspection,
yielding 40 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the
inspection point are $1,100 per unit. The current disposal price of the spoiled units is $235 per unit. When
the spoilage is detected, the spoiled goods are inventoried at $235 per unit.
1. What is the normal spoilage rate?
2. Prepare the journal entries to record the normal spoilage, assuming the following:
a. The spoilage is related to a specific job.
b. The spoilage is common to all jobs.
c. The spoilage is considered abnormal.