Biology Forums - Study Force

A company manufactures draperies. Because of strict production specifications, the manufacturing department often has spoiled items. If the spoiled items are under 10 percent of a job's total items they are treated as normal spoilage. During February job #101 for 200 draperies had 16 spoiled items. The spoiled items were detected immediately before they were packaged. They had already passed the safety inspection. The marketing manager believes the items can be sold for $280 each. They had a cost at point of detection of $600 each. These costs included $300 for direct manufacturing labour, $200 for direct materials, and $100 for factory overhead.

Required:
a.   Make the necessary journal entry, or entries, to record the spoiled units if the spoilage is normal and assigned to an overhead control account.
b.   Make the necessary journal entry, or entries, to record the spoiled units if the spoilage is assigned to job #101.

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Thanks!