grand canyon acc360 week 8 assignment

QUESTION

P18-36Spoilage in job costing.Jellyfish Machine Shop is a manufacturer of motorized carts for vacation resorts.Patrick Cullin, the plant manager of Jellyfish, obtains the following information for Job #10 in August 2014. A total of 46 units were started, and 6 spoiled units were detected and rejected at final inspection, yielding 40 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the inspection point are $1,100 per unit. The current disposal price of the spoiled units is $235 per unit. When the spoilage is detected, the spoiled goods are inventoried at $235 per unit.1.What is the normal spoilage rate?2.Prepare the journal entries to record the normal spoilage, assuming the following:a.The spoilage is related to a specific job.b.The spoilage is common to all jobs.c.The spoilage is considered to be abnormal spoilage.P18-37Rework in job costing, journal entry (continuation of 18-36).Assume that the 6 spoiled units of Jellyfish Machine Shop’s Job #10 can be reworked for a total cost of $1,800. A total cost of $6,600 associated with these units has already been assigned to Job #10 before the rework.Prepare the journal entries for the rework, assuming the following:a.The rework is related to a specific job.b.The rework is common to all jobs.c.The rework is considered to be abnormal.P18-38Scrap at time of sale or at time of production, journal entries (continuation of 18-36).Assume that Job #10 of Jellyfish Machine Shop generates normal scrap with a total sales value of $700 (it is assumed that the scrap returned to the storeroom is sold quickly).Prepare the journal entries for the recognition of scrap, assuming the following:a.The value of scrap is immaterial and scrap is recognized at the time of sale.b.The value of scrap is material, is related to a specific job, and is recognized at the time of sale.c.The value of scrap is material, is common to all jobs, and is recognized at the time of sale.d.The value of scrap is material, and scrap is recognized as inventory at the time of production and is recorded at its net realizable value.E20-16Economic order quantity for retailer.Fan Base (FB) operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its Los Angeles Galaxy soccer jerseys product line. This is a highly popular item. Data for 2013 are as follows:Expected annual demand for Galaxy jerseys 10,000Ordering cost per purchase order $200Carrying cost per year $7 per jerseyEach jersey costs FB $40 and sells for $80. The $7 carrying cost per jersey per year consists of the required return on investment of $4.80112%*$40 purchase price2plus $2.20 in relevant insurance, handling, and storage costs. The purchasing lead time is 7 days. FB is open 365 days a year.1.Calculate the EOQ.2.Calculate the number of orders that will be placed each year.3.Calculate the reorder point.P20-26EOQ, uncertainty, safety stock, reorder point.Stewart Corporation is a major automobile manufacturer. It purchases steering wheels from Coase Corporation. Annual demand is 10,400 steering wheels per year or 200 steering wheels per week. The ordering cost is $100 per order. The annual carrying cost is $13 per steering wheel. It currently takes 1.5 weeks to supply an order to the assembly plant.1.What is the optimal number of steering wheels that Stewart’s managers should order according to theEOQ model?2.At what point should managers reorder the steering wheels, assuming that both demand and purchase- order lead time are known with certainty?3.Now assume that demand can vary during the 1.5-week purchase-order lead time. The following table shows the probability distribution of various demand levels:Total Demand for Steering Wheels for 1.5 Weeks Probability of Demand (sums to 1)100 0.15200 0.20300 0.40400 0.20500 0.05If Stewart runs out of stock, it would have to rush order the steering wheels at an additional cost of $9 per steering wheel. How much safety stock should the assembly plant hold? How will this affect the reorder point and reorder quantity.

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