Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Fairchild Kitchens produces a variety of items in accordance with special job orders from hospitals, plant cafeterias, and university dormitories. An order for 2,200 cases

Fairchild

Kitchens produces a variety of items in accordance with special job orders from hospitals, plant cafeterias, and university dormitories. An order for

2,200

cases of mixed vegetables costs

$9

per case: direct materials,

$4;

direct manufacturing labor,

$3;

and manufacturing overhead allocated,

$2.

The manufacturing overhead rate includes a provision for normal spoilage. Consider each requirement independently.Read the requirements

LOADING...

.

Requirement 1. Assume that a laborer dropped

440

cases. Suppose part of the

440

cases could be sold to a nearby prison for

$440

cash. Prepare a journal entry to record this event. Calculate and explain briefly the unit cost of the remaining

1,760

cases.

Prepare a journal entry to record this event. (Abbreviations used: Mfg. = Manufacturing, Pay. = Payable. Record debits first, then credits. Exclude explanations from any journal entries.)

1.

Assume that a laborer dropped

440

cases. Suppose part of the

440

cases could be sold to a nearby prison for

$440

cash. Prepare a journal entry to record this event. Calculate and explain briefly the unit cost of the remaining

1,760

cases.

2.

Refer to the original data. Tasters at the company reject

440

of the

2,200

cases. The

440

cases are disposed of for

$880.

Assume that this rejection rate is considered normal.

a.

Prepare a journal entry to record this event, and calculate the unit cost if the rejection is attributable to exacting specifications of this particular job.

b.

Prepare a journal entry to record this event, and calculate the unit cost if the rejection is characteristic of the production process and is not attributable to this specific job.

c.

Are unit costs the same in requirements 2a and 2b? Explain your reasoning briefly.

3.

Refer to the original data. Tasters rejected

440

cases that had insufficient salt. The product can be placed in a vat, salt can be added, and the product can be reprocessed into jars. This operation, which is considered normal, will cost

$440.

a.

Prepare a journal entry to record this event, and calculate the unit cost of all the cases if this additional cost was incurred because of the exacting specifications of this particular job.

b.

Prepare a journal entry to record this event, and calculate the unit cost of all the cases if this additional cost occurs regularly because of difficulty in seasoning.

c.

Are unit costs the same in requirements 3a and 3b? Explain your reasoning briefly.

PrintDone

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Computerized Accounting Using QuickBooks Pro 2020

Authors: Alvin A. Arens, D. Dewey Ward, Carol J. Borsum

6th Edition

0912503793, 9780912503790

More Books

Students also viewed these Accounting questions