Vaughn Kitchens produces a variety of items in accordance with special job orders from hospitals, plant cafeterias, and university dormitories. An order for 2,100 cases of mixed vegetables costs $9 per case: direct materia $6; direct manufacturing labor, $2, and manufacturing overhead allocated, $1. The manufacturing overhead rate includes a provision for normal spoilage. Consider each requirement independently. Read the requirements. Requirements RE un 20 cash. Prepare a journal entry to record this event. Calculate and explain briefly the Pr fedits. Exclude explanations from any journal entries.) 1. Assume that a laborer dropped 420 cases. Suppose part of the 420 cases could be sold to a nearby prison for $420 cash. Prepare a journal entry to record this event. Calculate and explain briefly the unit cost of the remaining 1,680 cases. 2. Refer to the original data. Tasters at the company reject 420 of the 2,100 cases. The 420 cases are disposed of for $840. Assume that this rejection rate is considered normal. a. Prepare a journal entry to record this event, and calculate the unit cost if the rejection is attributable to exacting specifications of this particular job. b. Prepare a journal entry to record this event, and calculate the unit cost if the rejection is characteristic of the production process and is not attributable to this specific job. c. Are unit costs the same in requirements 2a and 2b? Explain your reasoning briefly. 3. Refer to the original data. Tasters rejected 420 cases that had insufficient salt. The product can be placed in a vat, salt can be added, and the product can be reprocessed into jars. This operation, which is considered normal, will cost $420. a. Prepare a journal entry to record this event, and calculate the unit cost of all the cases if this additional cost was incurred because of the exacting specifications of this particular job. b. Prepare a journal entry to record this event, and calculate the unit cost of all the cases if this additional cost occurs regularly because of difficulty in seasoning. c. Are unit costs the same in requirements 3a and 3b? Explain your reasoning briefly. 3 F F * * $840. Assume that this rejection rate is considered normal. reviations used: Mfg. = Manufacturing, Pay. = Payable. Record debits first, then credits. Print Done a. Prepare a journal entry to record this event if this additional cost was incurred because of the exacting specifications of this particular job. (Abbreviations used: Mfg. = Manufacturing, Pay. = Payable. Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Accounts Credit Debit 470 Work-in-Process Control Materials Control, Wages Pay. Control, Mfg. Overhead Allocated 470 Calculate the unit cost of all the cases if this additional cost was incurred because of the exacting specifications of this particular job. (Round the cost to two decimal places.) The unit cost is $ 9.20 b. Prepare a journal entry to record this event if the additional cost occurs regularly because of difficulty in seasoning. (Abbreviations used: Mfg. = Manufacturing, Pay. = Payable. Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Debit Credit Accounts Manufacturing Department Overhead Control Materials Control, Wages Pay. Control, Mfg. Overhead Allocated 470 470 b. Prepare a journal entry to record this event if the rejection is characteristic of the production process and is not attributable to this specific job. (Abbreviations used: Mfg. = Manufacturing, Pay. = Payable. Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Accounts Debit Credit Cash 940 3,2909 Manufacturing Department Overhead Control Work-in-Process Control 4,230 Calculate the unit cost if the rejection is characteristic of the production process and is not attributable to this specific job. The unit cost is $ 9.00 c. Are unit costs the same in requirements 2a and 2b? Explain your reasoning briefly. The unit costs in 2a and 2b are different. This is because the normal spoilage cost is charged as a cost of the job in 2a and the production process in 2b. In 2b, these costs are charged as part of manufacturing overhead cost of $2 per case, which includes a provision for normal spoilage. Requirement 3. Refer to the original data. Tasters rejected 470 cases that had insufficient salt. The product can be placed in a vat, salt can be added, and the product can be reprocessed into jars. This operation, which is considered normal, will cost $470. a. Prepare a journal entry to record this event if this additional cost was incurred because of the exacting specifications of this particular job. (Abbreviations used: Mfg. = Manufacturing, Pay. = Payable. Record debits first, then credits. Exclude explanations from any journal entries.)
