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Whitefish Machine Shop is a manufacturer of motorized carts for vacation resorts. Patrick Cullin, the plant manager of Whitefish obtains the following information for Job

Whitefish Machine Shop is a manufacturer of motorized carts for vacation resorts. Patrick Cullin, the plant manager of

Whitefish obtains the following information for Job #10 in August 2017. A total of 25 units were started, and 5 spoiled units were detected and rejected at final inspection, yielding 20 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the inspection point are $1,450 per unit. The current disposal price of the spoiled units is $235 per unit. When the spoilage is detected, the spoiled goods are inventoried at $235 per unit.

Requirement 1. What is the normal spoilage rate?

Select the formula, then calculate the normal spoilage rate. (Round the percentage to the nearest tenth percent, X.X%.)

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=

Normal spoilage rate

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=

%

Requirement 2. Prepare the journal entries to record the normal spoilage, assuming the following: a. The spoilage is related to a specific job. b. The spoilage is common to all jobs. c. The spoilage is considered to be abnormal spoilage. (Record debits first, then credits. Exclude explanations from any journal entries.)

a. The spoilage is related to a specific job.

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Journal Entry

Accounts

Debit

Credit

b. The spoilage is common to all jobs.

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Journal Entry

Accounts

Debit

Credit

c. The spoilage is considered to be abnormal spoilage.

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Journal Entry

Accounts

Debit

Credit

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