Alison and Alison (A&A) manufactures specialized digital hearing aids and uses job costing for reporting and tracking. Production costs for each hearing aid are as follows:

$200 for direct materials

$300 for direct manufacturing labour

$100 for manufacturing overhead.

Total = $600

During February 2021, 200 hearing aids were produced for Job #525, including 16 spoiled units. The spoiled units were detected at the end of the job, immediately before they were packaged. The marketing manager believes the spoiled items can be sold for $100 each. Assume the spoiled items are considered to be normal spoilage.

a) Make the necessary journal entry to record the spoiled units if the spoilage is considered to be common to all jobs and not specifically attributable to Job #525. (2 marks)

b) Make the necessary journal entry to record the spoiled units if the spoilage is considered to be attributable to the strict specifications of Job #525. (2 marks)

c) Make the necessary journal entry to record the spoilage if, instead, the spoilage is considered to all be abnormal. (2 marks)

d) Which scenario above (a, b or c) would result in the highest cost per unit? Explain, without providing any calculations or numbers. (2 marks)