Question

The Omega Company manufactures customized motors on a job-order basis. Job 492 is an order for 100 units. It requires the following: direct materials $3,000 direct labor ($10/hr) 1,000 overhead (150% DL$) 1,500 After inspection, 2 units required rework which required 8 additional direct labor hours and $60 of materials. If the rework is considered normal spoilage, what is the journal entry for overhead control?

a. materials $60 payroll $80 overhead control $140
b. no journal entry is needed
c. none of the above
d. overhead control $140 materials $60 payroll $80

Answer 1

The journal entry for overhead control when considering the rework as normal spoilage is: overhead control $140, materials $60, payroll $80.

Step-by-step explanation:

The journal entry for overhead control when considering the rework as normal spoilage is:

d. overhead control $140 materials $60 payroll $80

This entry reflects the additional overhead cost ($140) incurred due to the rework, as well as the cost of materials ($60) and direct labor ($80) associated with the rework. By recording this journal entry, the company recognizes the additional costs caused by normal spoilage in the overhead control account.