PART 4 During the month of April, Waste Management Company incurred some significant scrap, rework, and spoilage costs. As the new management accountant, you have been asked to prepare the journal entries necessary to record these costs. You have found the following information: Scrap: Scrap was sold for $5,000. You check with the manager and find that the scrap could not be identified as coming from any particular job and that the amount $5,000 is not material. Rework: Rework occurred on one job during the month. Job 25 rework required $500 in direct materials and $1,000 in direct labor. The production manager believed that this was just normal rework that occurs due to the type of production process in place. Overhead is applied at 40% of direct labor cost. Spoilage: 40 units made in job 27 were rejected by quality control inspection. From talking to the production manager, you learn that 25 of the units rejected were considered normal for this job. The rest were considered beyond normal expectations. This job was not unique relative to any other job, according to the manager. From the job cost sheet, the direct materials and direct labor costs per unit on this job were $10 and $12, respectively. Overhead is applied at 50% of direct labor cost