Defective work
Julian Manufacturing Co. manufactures an integrated transistor circuit board for repeat customers but also accepts special orders for the same product. Job No. MS1 incurred the following unit costs for 1,000 circuit boards manufactured:
Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6.00
Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.00
Factory overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.00
Total cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11.00
When the completed products were tested, 50 circuit boards were found to be defective. The costs per unit of correcting the defects follow:
Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3.00
Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.00
Factory overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.00
Record the journal entry for the costs to correct the defective work:
a. If the cost of the defective work is charged to factory overhead.
b. If the cost of the defective work is charged to the specific job.
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