Google Co. completed 3,600 expensive ladies bags during the last quarter of the current year. The following cost per units are as follows: Materials, P1,000; Labor, P900; Factory overhead including P20 allowance for spoilage, P400. Final inspection revealed that 600 bags were spoiled which were sold as export overruns at 60% of production cost. The good units were delivered and billed to the customer at 60% gross profit. The spoilage is due to the exacting specifications of the customer. How much is the billing price?

Google Co. completed 3,600 expensive ladies bags during the last quarter of the current year. The following cost per units are as follows: Materials, P1,000; Labor, P900; Factory overhead including P20 allowance for spoilage, P400. Final inspection revealed that 600 bags were spoiled which were sold as export overruns at 60% of production cost. The good units were delivered and billed to the customer at 60% gross profit. The spoilage is due to the exacting specifications of the customer. How much is the billing price?

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter2: Accounting For Materials

Section: Chapter Questions

Problem 15P: One of the tennis rackets that Ace Sporting Goods manufactures is a titanium model (Slam) that sells...

See similar textbooks

Similar questions

Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. At the zero-defect state, Nabors expects to spend 375,000 on quality engineering, 75,000 on vendor certification, and 50,000 on packaging inspection. Assume sales to be 25,000,000. Required: 1. Prepare a long-range performance report for 20x5. What does this report tell the management of Nabors? 2. Explain why quality costs still are present for the zero-defect state. 3. What if Nabors achieves the zero-defect state reflected in the report? What are some of the implications of this achievement?
Luke Co. completed 3,600 expensive ladies bags during the last quarter of the current year. The following cost per units are as follows: Materials, P1,000; Labor, P900; Factory overhead including P20 allowance for spoilage, P400. Final inspection revealed that 600 bags were spoiled which were sold as export overruns at 60% of production cost. The good units were delivered and billed to the customer at 60% gross profit. The spoilage is due to the exacting specifications of the customer.How much is the billing price? PPP, QQQ and RRR are partners sharing profits and losses of 5:3:2, respectively. As of December 31, 2020, their capital balances were P99,750; P84,000 and P63,000 respectively. On January 1, 2021, the partners admitted SSS as a new partner and according to their agreement, SSS will contribute P84,000 in cash to the partnership and also pay P10,500 for 15% of QQQ’s share. SSS will be given a 20% share in profits, while the original partners’ share will be…
Weat
MARIKINA SHOE Company had a production run of 5, 000 pairs of quality shoes during the month of June 2021, at the following costs per pair: Materials, P80; Labor, P50; and Overhead (125% of direct labor cost). Final inspection revealed that 500 pairs were spoiled which were sold as seconds for P20, 000. The good units were then shipped to the customer at cost plus 50% mark-up on cost. Assuming the spoilage is a result of changes in the specification of the customer, the cost per good units is: A. 192.5 B. 209.44 C. 200.53 D. 288.75
Cost of qualityElijah Electronics makes wireless headphone sets. The firm produced 76,500 wireless headphone sets during its first year of operation. At year-end, it had no inventory of finished goods. Elijah sold 71,910 units through regular market channels, but 765 of the units produced were so defective that they had to be sold as scrap. The remaining units were reworked and sold as seconds. For the year, the firm spent $408,000 on prevention costs and $204,000 on quality appraisal. There were no customer returns. An income statement for the year follows. Sales Regular channel $14,382,000 Seconds 363,375 Scrap 26,775 $14,772,150 Cost of goods sold Original production costs $4,889,880 Rework costs 107,100 Quality prevention and appraisal 612,000 $5,608,980 Gross margin $9,163,170 Selling and administrative expenses (all fixed) 2,499,000 Profit before income taxes $6,664,170 a. Compute the total pre-tax profit lost by the company in…
Cost of qualityElijah Electronics makes wireless headphone sets. The firm produced 58,500 wireless headphone sets during its first year of operation. At year-end, it had no inventory of finished goods. Elijah sold 54,990 units through regular market channels, but 585 of the units produced were so defective that they had to be sold as scrap. The remaining units were reworked and sold as seconds. For the year, the firm spent $312,000 on prevention costs and $156,000 on quality appraisal. There were no customer returns. An income statement for the year follows. Sales Regular channel $10,998,000 Seconds 277,875 Scrap 20,475 $11,296,350 Cost of goods sold Original production costs $3,739,320 Rework costs 81,900 Quality prevention and appraisal 468,000 $4,289,220 Gross margin $7,007,130 Selling and administrative expenses (all fixed) 1,911,000 Profit before income taxes $5,096,130 a. Compute the total pre-tax profit lost by the company in…
Kuchen Manufacturing uses backflush costing to account for an electronic meter it makes. During August 2008, the firm produced 16,000 meters of which it sold 15,800. The standard cost for each meter is: Direct material P 20 Conversion costs 44 Total P 64 Assume that the company had no inventory on August 1. The following event took place in August: Purchased P320,000 of direct materials. Incurred P708,000 of conversion costs. Applied P704,000 of conversion costs to Raw and In Process Inventory. Finished 16,000 meters. Sold 15,800 meters for P100 each. Amount of Cost of Goods Sold after the adjustment of over-under applied conversion cost:
Hawkins Audio Video, Inc. manufactures digital cameras. Hawkins is considering whether it should outsource production of a part used in the manufacturing of its cameras. 60,000 units of the part were made by Hawkins last year. At this production level, the company incurred the following direct product costs: Direct Materials $250,000 Direct Labor $104,000 Manufacturing Overhead incurred during the same period for production of the part is represented by the following cost behavior equation: y = $0.10x + $50,000. If the part were purchased from an outside supplier, 80% of the total fixed manufacturing overhead cost would continue, and the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional income from this other product would be $12,600 per year. A supplier has been identified who can sell the part to Hawkins at a price of $7.80 per unit. Which of…
Finch Modems has excess production capacity and is considering the possibility of making and selling paging equipment. The following estimates are based on a production and sales volume of 1,600 pagers. Unit-level manufacturing costs are expected to be $26. Sales commissions will be established at $1.60 per unit. The current facility- level costs, including depreciation on manufacturing equipment ($66,000), rent on the manufacturing facility ($56,000), depreciation on the administrative equipment ($13,800), and other fixed administrative expenses ($74,950), will not be affected by the production of the pagers. The chief accountant has decided to allocate the facility-level costs to the existing product (modems) and to the new product (pagers) on the basis of the number of units of product made (i.e., 5,600 modems and 1,600 pagers). Required a. Determine the per-unit cost of making and selling 1,600 pagers. (Do not round intermediate calculations. Round your answer to 3 decimal places.)…
Gibson Modems has excess production capacity and is considering the possibility of making and selling paging equipment. The following estimates are based on a production and sales volume of 1,800 pagers.Unit-level manufacturing costs are expected to be $28. Sales commissions will be established at $1.80 per unit. The current facility-level costs, including depreciation on manufacturing equipment ($68,000), rent on the manufacturing facility ($58,000), depreciation on the administrative equipment ($14,400), and other fixed administrative expenses ($75,950), will not be affected by the production of the pagers. The chief accountant has decided to allocate the facility-level costs to the existing product (modems) and to the new product (pagers) on the basis of the number of units of product made (i.e., 5,800 modems and 1,800 pagers).Requireda. Determine the per-unit cost of making and selling 1,800 pagers. (Do not round intermediate calculations. Round your answer to 3 decimal places.)
Acme Enterprises, a hypothetical company that prepares its financial statements inaccordance with IFRS, manufactures tables. In 2009, the factory produced 900,000finished tables and scrapped 1,000 tables. For the finished tables, raw material costswere €9 million, direct labor conversion costs were €18 million, and productionoverhead costs were €1.8 million. Th e 1,000 scrapped tables (attributable to abnormal waste) had a total production cost of €30,000 (€10,000 raw material costs and€20,000 conversion costs; these costs are not included in the €9 million raw materialand €19.8 million total conversion costs of the finished tables). During the year,Acme spent €1 million for freight delivery charges on raw materials and €500,000 forstoring finished goods inventory. Acme does not have any work-in-progress inventoryat the end of the year. 1. What costs should be included in inventory in 2009?2. What costs should be expensed in 2009?
Sardi Inc. is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 13,100 of the components each year. The unit product cost of the component according to the company's cost accounting system is given as follows: Direct materials $ 8.90 Direct labor 5.90 Variable manufacturing overhead 1.70 Fixed manufacturing overhead 3.70 Unit product cost $ 20.20 Assume that direct labor is a variable cost. Of the fixed manufacturing overhead, 20% is avoidable if the component were bought from the outside supplier. In addition, making the component uses 2 minutes on the machine that is the company's current constraint. If the component were bought, time would be freed up for use on another product that requires 4 minutes on this machine and that has a contribution margin of $5.30 per unit. When deciding whether to make or buy the component, what cost of making the component should be compared to the…