50. Estimated costs of defective work ( considered normal in the manufacturing process) are included in the predetermined factoryoverhead rate.During March, Job # 321 for 2,000 units were completed at the following costs per unit:Direct materialsP 5Direct labor4Factory overhead (applied at 150% of direct labor cost)_ 6P 15====Final inspection disclosed 100 defective units, which were reworked at a cost of P 2 per unit fordirect labor, plus overhead at the predetermined rate. The defective units fall within the normalrange. What is the total rework cost and to what account should it be charged?

Job costing is a form or type of costing, in which all costs and expenses related to the particular…

Answered: ied at 150% of direct labor cost) 6 P…

Business

Accounting

ied at 150% of direct labor cost) 6 P 15

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

50. Estimated costs of defective work ( considered normal in the manufacturing process) are included in the predetermined factory
overhead rate.
During March, Job # 321 for 2,000 units were completed at the following costs per unit:
Direct materials
P 5
Direct labor
4
Factory overhead (applied at 150% of direct labor cost)_ 6
P 15
====
Final inspection disclosed 100 defective units, which were reworked at a cost of P 2 per unit for
direct labor, plus overhead at the predetermined rate. The defective units fall within the normal
range. What is the total rework cost and to what account should it be charged?

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