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If the spoiled units are the result of an internal failure, what is the unit cost of goods units? (round-off to 2 decimal places)

If the spoiled units are the result of an internal failure, what is the unit cost of goods units? (round-off to 2 decimal places)

FINANCIAL ACCOUNTING
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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If the spoiled units are the result of an internal failure, what is the unit cost of goods units? (round-off to 2 decimal places)

NUBD Co. manufactures metal products that require casting, such as engine blocks, pistons and engine housings. During the current year, an order of 30,000 custom housing was begun on Job no. 123 for Mr. Daniel. After the job was completed the housing was inspected and 4% of the units were determined to be defective. Mr. Daniel agreed to accept the good units only at 140% cost. The spoiled units can be sold as seconds for P15 each. Spoiled goods are kept in an inventory account separate from finished goods. Total costs charged to Job no. 123 are: Materials Labor (6,000 hours x P14 per hour) Factory overhead (P30 per labor hour) P276,000 84,000 180,000
Transcribed Image Text:NUBD Co. manufactures metal products that require casting, such as engine blocks, pistons and engine housings. During the current year, an order of 30,000 custom housing was begun on Job no. 123 for Mr. Daniel. After the job was completed the housing was inspected and 4% of the units were determined to be defective. Mr. Daniel agreed to accept the good units only at 140% cost. The spoiled units can be sold as seconds for P15 each. Spoiled goods are kept in an inventory account separate from finished goods. Total costs charged to Job no. 123 are: Materials Labor (6,000 hours x P14 per hour) Factory overhead (P30 per labor hour) P276,000 84,000 180,000
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