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Jhena Co. produces plastic pipe to customer specifications. Losses of less than 5 percent are...

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Accounting

Jhena Co. produces plastic pipe to customer specifications. Losses of less than 5 percent are considered normal because they are inherent in the production process. The company applies overhead to product using machine hours. Jhena Co. used the following information in setting its pre-determined overhead rate for 2010:

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CoursHeroTranscribedText: Expected overhead other than rework P425,000 Expected rework costs 37,500 Expected machine hours 50,000 During 2010, the following production and cost data were accumulated: Total good production completed 2,000,000 fet of pipe Total defects 40,000 feet of pipe Ending inventory 75,000 feet of pipe Total cost of diect materials for Job#2720 P 343,550 Total cost of conversion for Job #2720 P 78,875 Total machine hours for Job #2720 1,540 Cost of reworking defects during 2010 P 37,350 Total actual overhead cast for 2010 P 431.000

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