Grace Company manufactures picture frames of all sizes and shapes and uses job-order costing system. There is always some spoilage in each production run. The following costs relate to the current run: Estimated overhead (exclusive of spoilage) Spoilage (estimated) Sales value of spoiled frames Labor hours P 160,000 25,000 11,500 100,000 The actual cost of a spoiled picture frame is P7.00. During the year, 170 frames are considered spoiled. Each spoiled frame can be sold for P4. The spoilage is considered a part of all jobs (factory overhead). What amount should be debited to Factory Overhead Control to record spoilage pertaining to unrecovered cost?
Grace Company manufactures picture frames of all sizes and shapes and uses job-order costing system. There is always some spoilage in each production run. The following costs relate to the current run: Estimated overhead (exclusive of spoilage) Spoilage (estimated) Sales value of spoiled frames Labor hours P 160,000 25,000 11,500 100,000 The actual cost of a spoiled picture frame is P7.00. During the year, 170 frames are considered spoiled. Each spoiled frame can be sold for P4. The spoilage is considered a part of all jobs (factory overhead). What amount should be debited to Factory Overhead Control to record spoilage pertaining to unrecovered cost?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Grace Company manufactures picture frames of all sizes and shapes and uses job-order costing system. There is
always some spoilage in each production run. The following costs relate to the current run:
Estimated overhead (exclusive of spoilage)
Spoilage (estimated)
Sales value of spoiled frames
Labor hours
P 160,000
25,000
11,500
100,000
The actual cost of a spoiled picture frame is P7.00. During the year, 170 frames are considered spoiled. Each
spoiled frame can be sold for P4. The spoilage is considered a part of all jobs (factory overhead). What amount
should be debited to Factory Overhead Control to record spoilage pertaining to unrecovered cost?
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