Global produces parts for use in various industries. Global uses a job-costing system. The nature of its process is such that management expects normal spoilage at a rate of 2% of good parts. Data for last month is as follows: (Click the icon to view the data for the last month.) The spoiled parts were identified after 100% of the direct material cost was incurred. The disposal value is $3/part. Read the requirements? Requirement 1. Record the journal entries if the spoilage was (a) job specific or (b) common to all jobs. (Record debits first, then credits. Exclude explanations from any journal entries.) Begin by preparing the journal entry for normal spoilage if the spoilage was a) job specific. Journal Entry Accounts Debit Credit Next, prepare the journal entry to record abnormal spoilage if the spoilage was (a) job specific. Journal Entry Accounts Debit (5) N N (6) Credit Now prepare the journal entry for normal spoilage if the spoilage was (b) common to all jobs. Journal Entry Accounts Debit Credit (9) (10) (11) (12) Finally, create the journal entry to record abnormal spoilage if the spoilage was (b) common to all jobs. Journal Entry Accounts Debit (13) Credit Requirement 2. Comment on the differences arising from the different treatment for these two scenarios When the spoilage is specific to a certain job, the (17) - . Therefore, the cost per good part of that job will be (18) 6: Data Table Production (units) Good parts produced Direct material cost/unit 30,000 29,000 11.00 $ 7: Requirements 1. Record the journal entries if the spoilage was (a) job specific or (b) common to all jobs. 2. Comment on the differences arising from the different treatment for these two scenarios. (1) O O Cash O Loss from Abnormal Spoilage O Manufacturing Overhead Allocated O Manufacturing Overhead Control O Material Control Wages Payable Work-in-Process (2) O O Cash Loss from Abnormal Spoilage O Manufacturing Overhead Allocated O Manufacturing Overhead Control O Material Control Wages Payable Work-in-Process (3) O O Cash O Loss from Abnormal Spoilage Manufacturing Overhead Allocated O Manufacturing Overhead Control Material Control Wages Payable Work-in-Process (4) O O Cash O Loss from Abnormal Spoilage O Manufacturing Overhead Allocated O Manufacturing Overhead Control Material Control Wages Payable Work-in-Process (5) O O Cash O Loss from Abnormal Spoilage O Manufacturing Overhead Allocated O Manufacturing Overhead Control O Material Control Wages Payable Work-in-Process (6) O O Cash O Loss from Abnormal Spoilage O Manufacturing Overhead Allocated Manufacturing Overhead Control O Material Control Wages Payable Work-in-Process (7) O O Cash O Loss from Abnormal Spoilage Manufacturing Overhead Allocated O Manufacturing Overhead Control O Material Control Wages Payable Work-in-Process (8) O O Cash Loss from Abnormal Spoilage O Manufacturing Overhead Allocated O Manufacturing Overhead Control O Material Control O Wages Payable Work-in-Process (9) O O Cash O Loss from Abnormal Spoilage Manufacturing Overhead Allocated O Manufacturing Overhead Control O Material Control Wages Payable Work-in-Process (11) (10) O O Cash Loss from Abnormal Spoilage Manufacturing Overhead Allocated O Manufacturing Overhead Control O Material Control Wages Payable Work-in-Process O O Cash Loss from Abnormal Spoilage O Manufacturing Overhead Allocated O Manufacturing Overhead Control Material Control O Wages Payable Work-in-Process (12) O O Cash O Loss from Abnormal Spoilage O Manufacturing Overhead Allocated O Manufacturing Overhead Control O Material Control 0 Wages Payable Work-in-Process (13) O O Cash Loss from Abnormal Spoilage Manufacturing Overhead Allocated Manufacturing Overhead Control O Material Control O Wages Payable Work-in-Process (14) O O Cash O Loss from Abnormal Spoilage O Manufacturing Overhead Allocated O Manufacturing Overhead Control O Material Control Wages Payable Work-in-Process (15) O O Cash O Loss from Abnormal Spoilage O Manufacturing Overhead Allocated O Manufacturing Overhead Control O Material Control O Wages Payable Work-in-Process (18) (17) O O cost is spread evenly across all jobs job absorbs the cost of those spoiled parts less the disposal value higher lower (16) O O Cash O Loss from Abnormal Spoilage Manufacturing Overhead Allocated O Manufacturing Overhead Control Material Control Wages Payable Work-in-Process
