50.1K

Verified Solution

Link Copied!

Job order costing; rework

Canyon City Co$.$ uses a job order costing system that combines actual direct material and actual direct labor costs with a predetermined overhead charge based on machine hours. Expected overhead and machine hours of $$1,705,200$ and $174,000,$ respectively, were used in developing the predetermined rate for the year.

During the year, the company worked on Job #$876$ and incurred the following costs and machine hours:

Direct material $$57,000$

Direct labor $$26,160$

Machine hours $390$

a$.$

$1.$ What is the total cost of Job #$876?$ $Answer

$2.$ What is the cost per unit if $1,800$ were made?

Note: Round your answer to two decimal places.

$Answer

b$.$ In completing Job #$876,36$ units were defective and had to be reworked at a cost of $$25$ each. Assume that spoilage and rework costs were included in the original estimated overhead costs. Where does the $$900$ rework cost appear in the accounts of Canyon City Co$.?$

Answer

c$.$ Disregard the facts in $($b$).$ Upon completing Job #$876,$ the quality control inspector determined that $36$ units were spoiled and would be unacceptable to the customer. Thirty$-$six additional good units were made at a total cost of $$1,668.$ The spoiled units were sold for $$288$ as "seconds" to an outlet store. What is the total cost of Job #$876?$

$Answer

Answer & Explanation Solved by verified expert

See Answer