Hogan Ltd. uses a standard cost system in its manufacturing process. During a recent job, it noticed that its spoilage rate was high. Normal spoilage rate averages 8% of units started. Direct materials are added at the beginning of the process. Inspection occurs at the 75% point. Other information about the job follows:

Spoiled units have no salvage value.
Required:
Make necessary journal entries to record all spoilage.

Question

Hogan Ltd. uses a standard cost system in its manufacturing process. During a recent job, it noticed that its spoilage rate was high. Normal spoilage rate averages 8% of units started. Direct materials are added at the beginning of the process. Inspection occurs at the 75% point. Other information about the job follows:
 
Spoiled units have no salvage value.
Required:
Make necessary journal entries to record all spoilage.

Quizplus · Accepted Answer

The Answer of Hogan Ltd. uses a standard cost system in its manufacturing process. During a recent job, it noticed that its spoilage rate was high. Normal spoilage rate averages 8% of units started. Direct materials are added at the beginning of the process. Inspection occurs at the 75% point. Other information about the job follows:
 
Spoiled units have no salvage value.
Required:
Make necessary journal entries to record all spoilage.

Hogan Ltd Uses a Standard Cost System in Its Manufacturing Process