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Job order costing; rework San Angelo Corp. uses a job order costing system for client contracts related to custom- manufactured pulley systems. Elmore Mechanical recently
Job order costing; rework San Angelo Corp. uses a job order costing system for client contracts related to custom- manufactured pulley systems. Elmore Mechanical recently ordered 20,000 pulleys, and the job was assigned #BA468. Information for Job #BA468 revealed the following: Direct material $24,480 Direct labor 29,520 Overhead 22,080 Final inspection of the pulleys revealed that 138 were defective. In correcting the defects, an additional $690 of cost was incurred ( $150 for direct material and $540 for direct labor). After the defects were corrected, the pulleys were included with the other good units and shipped to the customer. Assume no entry has been made for the $690 of rework costs. Note: In answering the following questions, list any multiple debits or credits in alphabetical order. a. Journalize the entry to record incurrence of the rework costs if San Angelo Corp.'s predetermined overhead rate includes normal rework costs. Account Debit Credit - 0 0 0 O o 0 To record rework costs b. Journalize the entry to record incurrence of the rework costs if rework is normal but specific to this job. Account Debit Credit 0 0 0 0 0 0 To record rework costs C. Journalize the entry to record incurrence of the rework costs, assuming that all rework is abnormal. Account Debit Credit 0 0 T 0 0 A 0 0 To record rework costs
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