China Pacific Ltd. has a department that manufactures wooden horses. The following information is for the production of these wooden horses for the month of February:

Work-in-process inventory, 1 Feb.	40,000 wooden horses
Direct materials cost: 100% complete	$400,000
Conversion: 20% complete	$460,000
Units started during February	60,000 wooden horses
Units completed during February and Transferred out	80,000 wooden horses
Work-in-process inventory, 28 Feb	20,000 wooden horses
Direct materials:	100% complete
Conversion cost:	40% complete
Costs incurred during February
Direct materials	$200,000
Conversion	$380,000

Required:

Assume China Pacific Ltd. gives you the following information regarding operations for September 20x2:

Total wooden horses manufactured      64,000

Wooden horses rejected as spoiled units  2,400

Total manufacturing cost              $2,560,000

Assume the spoiled units have no disposal value.

(i) What is the unit cost of making the 64,000 horse?

(ii) What is the total cost of the 2,400 spoiled units?

(iii) If the spoilage is considered normal, what is the increase in the unit cost of good horses manufactured as a result of the spoilage?

(iv) If the spoilage is considered abnormal, prepare the journal entries for the spoilage incurred.