QUESTION C: Spoilage Parmar Fumishings produces commercial office furnishing for educational institutions, hospitals, and offices. The company uses a job costing system to record its costs. A recent order for 2,500 sections of wall units had the following costs per unit: Direct materials Direct labour Manufacturing overhead allocated $300 $200 $100 $600 1. Assume that a forklift driver dropped a crate of 200 finished wall unit sections, damaging them. This type of damage was not considered as normal. Suppose some of the wall units with minimal damage could be sold to a wholesale warehouse for $20,000. Prepare a journal entry to record this event. Calculate and briefly explain the unit cost of the remaining 2,300 wall units. 2. Refer to the original data. Inspectors at the company rejected 200 of the 2,500 wall units due to dents and scratches. The wall units were sold to a local contractor at a discount for $40,000. The contractor used the units to furnish a building. Assume this rejection rate is considered normal. a. Prepare the journal entry and calculate the unit cost if the rejection is attributable to this particular job. b. Prepare the journal entry and calculate the unit cost if the rejection is common to all jobs.