Question 2 (12 marks) James St Pty Ltd is an apparel manufacturer. The company manufactures bespoke fashion for a number of boutiques. Job #21 in May 2018 required the manufacture of a minimum of 25 good dresses (units) but would accept up to 30. To achieve 25 dresses, the manufacturer would typically start 30 dresses in total. The dresses are inspected at the end of the manufacturing process for any defects. Manufacturing costs assigned to the job prior to the inspection point were $1,000 per unit (consisting of direct materials of $500, direct labour of $400 and allocated overhead of $100). The company rate includes an allowance for normal spoilage common to all jobs. budgeted overhead rate of 25% of direct labour cost. This uses a The company is easily able to dispose of all seconds (i.e., it's spoiled units) for $300 each at Outlet Seconds Sales days and as a result, records this salvage value for each unit spoiled in inventory until the sale. Required: (a) Prepare the journal entry to record the spoilage for Job#21 if it is considered normal spoilage common to all jobs (3 marks) (b) Prepare the journal entry to record the normal spoilage for Job# 21 if it is considered to be attributable to the specific job. (3 marks) (c) Prepare the journal entry to record the spoilage for Job#21 if it is considered abnormal spoilage (3 marks) (d) Assume the 5 defective (spoiled) dresses can be reworked for an additional cost. The manufacturing manager provided the following information on the rework costs for the 5 dresses: $200 $300 Direct Materials Direct Labour Overhead Prepare the journal entry if the rework is considered common to all jobs (3 marks) Question 2 (12 marks) James St Pty Ltd is an apparel manufacturer. The company manufactures bespoke fashion for a number of boutiques. Job #21 in May 2018 required the manufacture of a minimum of 25 good dresses (units) but would accept up to 30. To achieve 25 dresses, the manufacturer would typically start 30 dresses in total. The dresses are inspected at the end of the manufacturing process for any defects. Manufacturing costs assigned to the job prior to the inspection point were $1,000 per unit (consisting of direct materials of $500, direct labour of $400 and allocated overhead of $100). The company rate includes an allowance for normal spoilage common to all jobs. budgeted overhead rate of 25% of direct labour cost. This uses a The company is easily able to dispose of all seconds (i.e., it's spoiled units) for $300 each at Outlet Seconds Sales days and as a result, records this salvage value for each unit spoiled in inventory until the sale. Required: (a) Prepare the journal entry to record the spoilage for Job#21 if it is considered normal spoilage common to all jobs (3 marks) (b) Prepare the journal entry to record the normal spoilage for Job# 21 if it is considered to be attributable to the specific job. (3 marks) (c) Prepare the journal entry to record the spoilage for Job#21 if it is considered abnormal spoilage (3 marks) (d) Assume the 5 defective (spoiled) dresses can be reworked for an additional cost. The manufacturing manager provided the following information on the rework costs for the 5 dresses: $200 $300 Direct Materials Direct Labour Overhead Prepare the journal entry if the rework is considered common to all jobs
