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 $2,100 and direct labor of $1,100. Overhead is applied at the rate of 110 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 $600 and direct labor costing $300. 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. 2. Make any needed journal entry to the overhead control account. If an amount box does not require an entry, leave it blank. 3. What if the additional rework required $600 direct labor? What would be the effect on the cost of the Tramel job?

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 $2,100 and direct labor of $1,100. Overhead is applied at the rate of 110 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 $600 and direct labor costing $300. 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. 2. Make any needed journal entry to the overhead control account. If an amount box does not require an entry, leave it blank. 3. What if the additional rework required $600 direct labor? What would be the effect on the cost of the Tramel job?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Solomon Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Solomon's normal sales territory, asks Solomon to pour 49 slabs for Lancing's new development of homes. Solomon has the capacity to build 330 slabs and is presently working on 180 of them. Lancing is willing to pay only $2,630 per slab. Solomon estimates the cost of a typical job to include unit-level materials, $860; unit-level labor, $530; and an allocated portion of facility-level overhead, $1,310. Required Calculate the contribution to profit from the special order. Should Solomon accept or reject the special order to pour 49 slabs for $2,630 each? Contribution to profit Should Solomon accept or reject the special order? Accept
Alter's Home Center (AHC) sells renovation and remodeling products to both contractors and individual home owners. One of the services AHC offers is delivery of the purchased products to the customer's work site. Because not all customers take advantage of the delivery service option, ACH adds 10 percent to the cost of the products purchased to cover the delivery cost. A business intern spent the summer at ACH. The intern's assignment was to analyze the delivery service and recommend a better way to charge customers for using it. The intern, who had studied activity-based costing, identified the following activities and the data related to them: Activity Picking order Delivering order Handling complaints Total delivery cost Cost Driver Number of items Number of orders Number of complaints Total order value (before delivery charge) Number of orders Annual Cost $ 321,640 850,500 29,440 $ 1,201,580 The intern selected two customers, who were frequent customers, to use as an illustration…
Rene is working with the operations manager to determine what the standard labor cost is for a spice chest. He has watched the process from start to finish and taken detailed notes on what each employee does. The first employee selects and mills the wood, so it is smooth on all four sides. This takes the employee 1 hour for each chest. The next employee takes the wood and cuts it to the proper size. This takes 30 minutes. The next employee assembles and sands the chest. Assembly takes 2 hours. The chest then goes to the finishing department. It takes 1.5 hours to finish the chest. All employees are cross-trained so they are all paid the same amount per hour, $14.50. A. What are the standard hours per chest? Standard hour per chest fill in the blank 1 hours B. What is the standard cost per chest for labor? Round your answer to two decimal places. Standard cost per chest $fill in the blank 2
Adams Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Adams's normal sales territory, asks Adams to pour 50 slabs for Lancing's new development of homes. Adams has the capacity to build 360 slabs and is presently working on 210 of them. Lancing is willing to pay only $2,660 per slab. Adams estimates the cost of a typical job to include unit-level materials, $960; unit-level labor, $490; and an allocated portion of facility-level overhead, $1,300. Required Calculate the contribution to profit from the special order. Should Adams accept or reject the special order to pour 50 slabs for $2,660 each?
Ken Owens Construction specializes in small additions and repairs. His normal charge is $500/day plus materials. Due to his physical condition, David, an elderly gentleman, needs a downstairs room converted to a bathroom. Ken has produced a bid for $5,000 to complete the bathroom. He did not provide David with the details of the bid. However, they are shown here. Ken's Bid Detail Dollars Direct Material $2,100 Direct Labor 1,700 Variable overhead 100 Fixed overhead 700 Profit 400 $5,000 A. The town's social services has asked Ken if he could reduce his bid to $3,900. Should Ken accept the counter offer? Current Bid New Bid Direct Material $2,100 $2,100 Direct Labor 1,700 1,700 Variable overhead 100 100 Fixed overhead 700 Profit 400 $5,000 $3,900 No v B. How much would his income be reduced? C. If the town's social services guaranteed him another job next month at his normal price, could he accept this job at $3,900? Yes v Feedback
Answer questions
Alter's Home Center (AHC) sells renovation and remodeling products to both contractors and individual home owners. One of the services AHC offers is delivery of the purchased products to the customer's work site. Because not all customers take advantage of the delivery service option, ACH adds 10 percent to the cost of the products purchased to cover the delivery cost. A business intern spent the summer at ACH. The intern's assignment was to analyze the delivery service and recommend a better way to charge customers for using it. The intern, who had studied activity-based costing, identified the following activities and the data related to them: Activity Cost Driver Annual Cost Annual Driver Volume Picking order Number of items $ 286,000 357,500 items Delivering order Number of orders 522,500 27,500 orders Handling complaints Number of complaints 32,400 135 complaints Total delivery cost $ 840,900 The intern selected two customers, who were frequent customers, to…
Haresh
Swift Collision Repair uses activity-based costing to determine the costs of its cases. Information about costs follow: Cost Pool Budgeted Costs Budgeted Cost Driver Paint shop operations and clean up $300,000 750 paint jobs Machine costs 120,000 1,500 machine hours Facilities 80,000 2,000 labor hours Brian’s car was repaired after he was involved in a rear-end collision. The repair involved 3 hours of machine time, 5 hours of labor at 30$ per hour, and the rear of the car was repainted. How much overhead was assigned to brians repair job? a. $840 b. $2,000 c. 941 d. $990