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StormLrd StormLrd
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6 years ago
Boss Cycle generally has spoiled goods during each job. Costs are assigned to normal spoilage at $10.00 per unit and abnormal spoilage at $20.00 per unit. Disposal fees typically run $5.00 per item. Boss Cycle has a policy never to rework spoiled units. Management believes that once a unit is damaged it cannot be reworked into a quality product. The losses are charged back to the specific job.
What is the appropriate journal entry if 300 units are considered abnormal spoilage and are not disposed of in a process costing system?
A)
Loss from Abnormal Spoilage   $6,000
        Work-in-Process Control   $6,000
B)
Work-in-Process Control   $1,500
        Loss from Abnormal Spoilage   $1,500
C)
Loss from Abnormal Spoilage   $6,000
        Inventory   $6,000
D)
Loss from Abnormal Spoilage   $1,500
        Work-in-Process   $1,500
E)
Loss from Abnormal Spoilage   $1,500
        Work-in-Process Control   $1,500
Textbook 
Cost Accounting: A Managerial Emphasis, Canadian Edition

Cost Accounting: A Managerial Emphasis, Canadian Edition


Edition: 7th
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btpsandbtpsand
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