(Normal and abnormal discrete spoilage; WA) Brendan Tools manufactures oneof its products in a two department process. A separate Work in Process accountis maintained for each department, and Brendan Tools uses a weighted average process costing system. The first department is Molding; the second is GrindingAt the end of production in Grinding, a quality inspection is made and thenpackaging is added. Overhead is applied in the Grinding Department on machine hour basis. Production and cost data for the Grinding Department forAugust 2000 follow:
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Production Data |
|
|
Beginning inventory (complete: labor, 30%; overhead, 40%) |
2,000 units |
|
Transferred in from Molding |
49,800 units |
|
Normal spoilage (discrete—found at the end of processing during quality control) |
650 units |
|
Abnormal spoilage (found at end of processing during quality control) |
350 units |
|
Ending inventory (complete: labor, 40%; overhead, 65%) |
1,800 units |
|
Transferred to finished goods |
? units |
|
Cost Data |
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Beginning inventory: |
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|
Transferred in |
$ 6,050 |
|
|
Material (label and package) |
0 |
|
|
Direct labor |
325 |
|
|
Overhead |
750 |
$ 7,125 |
|
Current period: |
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|
Transferred in |
$149,350 |
|
|
Material (label and package) |
11,760 |
|
|
Direct labor |
23,767 |
|
|
Overhead |
50,932 |
235,809 |
|
Total cost to account for |
$242,934 |
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a. Prepare a cost of production report for the Grinding Department for August.
b. Prepare the journal entry to dispose of the cost of abnormal spoilage.