Question

Jellyfish Machine Shop is a manufacturer of motorized carts forvacation resorts. Patrick Cullin, the plant manager of Jellyfish,obtains the following information fo r Job # 10 in August 2014. Atotal of 46 units were started, and 6 spoiled units were detectedand rejected at the final inspection, yielding 40 good units. Thespoiled units were considered to be normal spoilage. Costs assignedprior to the inspection poi nt are $1,100 per unit. The currentdisposal price of the spoiled units is $235 per unit. When thespoilage is detected, the spoiled goods are inventoried at $235 perunit. Answer the following questions: 1. What is the normalspoilage rate? 2. Prepare the jo urnal entries to record the normalspoilage, assuming the following: a. The spoilage is related to aspecific job. b. The spoilage is common to all jobs. c. Thespoilage is considered to be abnormal spoilage.

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