Job costing, classifying spoilage, ethics. Flextron Company is a contract manufacturer for a variety of pharmaceutical and over-the-counter products. It has a reputation for operational excellence and boasts a normal spoilage rate of 2% of normal input. Normal spoilage is recognized during the budgeting process and is classified as a component of manufacturing overhead when determining the overhead rate. Lynn Sanger, one of Flextron’s quality control managers, obtains the following information for Job No. M102, an order from a consumer products company. The order was completed recently, just before the close of Flextron’s fiscal year. The units will be delivered early in the next accounting period. A total of 128,500 units were started, and 6,000 spoiled units were rejected at final inspection, yielding 122,500 good units. Spoiled units were sold at $4 per unit. Sanger indicates that all spoilage was related to this specific job. The total costs for all 128,500 units of Job No. M102 follow. The job has been completed, but the costs are yet to be transferred to Finished Goods.
1. Calculate the unit quantities of normal and abnormal spoilage.
2. Prepare the journal entries to account for Job No. M102, including spoilage, disposal of spoiled units, and transfer of costs to the Finished Goods account.
3. Flextron’s controller, Vince Chadwick, tells Marta Suarez, the management accountant responsible for Job No. M102, the following: “This was an unusual job. I think all 6,000 spoiled units should be considered normal.” Suarez knows that the work involved in Job No. M102 was not uncommon and that Flextron’s normal spoilage rate of 2% is the appropriate benchmark. She feels Chadwick made these comments because he wants to show a higher operating income for the year.
a. Prepare journal entries, similar to requirement 2, to account for Job No. M102 if all spoilage were considered normal. How will operating income be affected if all spoilage is considered normal?
b. What should Suarez do in response to Chadwick’s comment?
Refer to the information provided in Figure below to answer the question that follow. LA Not yet answered Marked out of 1.00 p Flag question Number of CDs per month \в 0 ...Apr 05 2021
Determine the phase shift and attenuation from the input to the output for the ladder network in Figure 72.Jul 31 2020
The Berlin Brewing Company was purchased three years ago in a leveraged buy-out resulting in long-term debt for the Company of $500 million. The debt is divided between $...Apr 29 2020
Sharon Bohnette owns 1,200 shares of Northern Chime Company. There are three seats on the board of directors up for election and Ms. Bohnett of the nominees. Under the tr...Apr 22 2021
In which of the following situations should we not use the transportation method of linear programming? A. To find a new site location for a plant B. To minimize costs ...Nov 20 2019
Show transcribed image text A simply supported pedestrian bridge is to be constructed in a city park and two designs have been proposed as shown in case a and case b. ...May 19 2020
The primary goal of the corporation and its managers is to increase firm value, thereby creating wealth for shareholders. The success of these efforts is best assessed by...Apr 29 2021
going concern valueMar 17 2020
DYI Construction Co. is considering a new inventory system that will cost $750,000. The system is expected to generate positive cash flows over the next four years in the...Apr 16 2021
Air contained in a rigid, insulated tank fitted with a paddle wheel, initially at 300K, 2bar, and a volume of 2m3, is stirred until its temperature is 500K. Assumingthe i...Jun 04 2020