Cost of Normal Spoilage Frieling Company installs granite countertops in customers' homes. First, the customer chooses the particular granite slab, and then Frieling measures the countertop area at the customer's home, cuts the granite to that shape, and installs it. The Tramel job calls for direct materials of $2,500 and direct labor of $500. Overhead is applied at the rate of 140 percent of direct labor cost. Unfortunately, one small countertop breaks during installation and Frieling must cut another piece and install it to properly complete the job. The additional rework required direct materials costing $1,000 and direct labor costing $700. Assume that the spoilage was due to carelessness by a Frieling worker and it is considered to be normal spoilage. Required: 1. Calculate the cost of the Tramel job. 3,700 Feedback ►Check My Work 2. Make any needed journal entry to the overhead control account. If an amount box does not require an entry, leave it blank. Overhead Control Materials Payroll Feedback ▼Check My Work See Cornerstone 5.4. 500 X 0☑ 400 X 0 100 X 3. What if the additional rework required $1,400 of direct labor? What would be the effect on the cost of the Tramel job? The cost of the Tramel job would not be affected.
Cost of Normal Spoilage Frieling Company installs granite countertops in customers' homes. First, the customer chooses the particular granite slab, and then Frieling measures the countertop area at the customer's home, cuts the granite to that shape, and installs it. The Tramel job calls for direct materials of $2,500 and direct labor of $500. Overhead is applied at the rate of 140 percent of direct labor cost. Unfortunately, one small countertop breaks during installation and Frieling must cut another piece and install it to properly complete the job. The additional rework required direct materials costing $1,000 and direct labor costing $700. Assume that the spoilage was due to carelessness by a Frieling worker and it is considered to be normal spoilage. Required: 1. Calculate the cost of the Tramel job. 3,700 Feedback ►Check My Work 2. Make any needed journal entry to the overhead control account. If an amount box does not require an entry, leave it blank. Overhead Control Materials Payroll Feedback ▼Check My Work See Cornerstone 5.4. 500 X 0☑ 400 X 0 100 X 3. What if the additional rework required $1,400 of direct labor? What would be the effect on the cost of the Tramel job? The cost of the Tramel job would not be affected.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
5.04 Cost of Normal Spoilage additional rework required direct materials costing $1,000 and direct labor costing $700. Assume that the spoilage was due to carelessness by a Frieling worker and it is considered to be normal spoilage. Required: Calculate the cost of the Tramel job. $ Feedback Check My Work Make any needed
Transcribed Image Text:Cost of Normal Spoilage
Frieling Company installs granite countertops in customers' homes. First, the customer chooses the particular granite slab, and then Frieling measures the countertop area at the customer's home, cuts the granite to that shape, and installs it. The Tramel job calls for
direct materials of $2,500 and direct labor of $500. Overhead is applied at the rate of 140 percent of direct labor cost. Unfortunately, one small countertop breaks during installation and Frieling must cut another piece and install it to properly complete the job. The
additional rework required direct materials costing $1,000 and direct labor costing $700. Assume that the spoilage was due to carelessness by a Frieling worker and it is considered to be normal spoilage.
Required:
1. Calculate the cost of the Tramel job.
3,700
Feedback
►Check My Work
2. Make any needed journal entry to the overhead control account. If an amount box does not require an entry, leave it blank.
Overhead Control
Materials
Payroll
Feedback
▼Check My Work
See Cornerstone 5.4.
500 X
0☑
400 X
0
100 X
3. What if the additional rework required $1,400 of direct labor? What would be the effect on the cost of the Tramel job?
The cost of the Tramel job would not be affected.
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