FIND: Assume that the rework is due to customer’s specifications: How much should be charged to Work In Process to record production before rework? How much should be charged to Work In Process to record the rework? What is the total cost of the 180 shirts delivered to Beacon Hills High School Student’s council? How much should Beacon Hills High School Student’s council pay for the 180 shirts? How much should each of the 180 students pay assuming that 10% discount was given by the supplier?
FIND: Assume that the rework is due to customer’s specifications: How much should be charged to Work In Process to record production before rework? How much should be charged to Work In Process to record the rework? What is the total cost of the 180 shirts delivered to Beacon Hills High School Student’s council? How much should Beacon Hills High School Student’s council pay for the 180 shirts? How much should each of the 180 students pay assuming that 10% discount was given by the supplier?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
In preparation for the 2022 English Week Celebration, Beacon Hills High School Student’s council entered into a contract with Beacon Clothing which shall produce 180 organizational shirts with the following costs:
Materials – P 8,000; Direct Labor – P 5,500 and Applied
Before the delivery, it was found out that a rework has to be done for all of the 180 shirts. As a consequence, additional P 5.00 for the materials, P 2.00 for labor and P 3.00 for overhead will be spent for each defective shirt with Beacon Clothing charges its customer at 50% above cost.
FIND: Assume that the rework is due to customer’s specifications:
- How much should be charged to Work In Process to record production before rework?
- How much should be charged to Work In Process to record the rework?
- What is the total cost of the 180 shirts delivered to Beacon Hills High School Student’s council?
- How much should Beacon Hills High School Student’s council pay for the 180 shirts?
- How much should each of the 180 students pay assuming that 10% discount was given by the supplier?
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