J Crockery received an order for 50 units of a product. In anticipation of spoilage production of 52 units was started. The following costs were incurred: Direct materials Rs. 80 per unit Direct labour Rs. 50 per unit Factory overhead 100% of direct labour During the inspection, 10 units were found defective and required the following additional costs. Direct materials Rs. 100 Direct labour Rs. 200 Factory overhead 100% of direct labour On final inspection, 2 units were classified as spoiled and sold for Rs. 90. The good units were dispatched to the customer at a price of Rs.240 per unit. Instructions: Pass journal entries to record the completion of order and sale of good and spoiled units under both of the assumption as to charge of the additional cost.
J Crockery received an order for 50 units of a product. In anticipation of spoilage production of 52 units was started. The following costs were incurred:
Direct materials Rs. 80 per unit
Direct labour Rs. 50 per unit
Factory overhead 100% of direct labour
During the inspection, 10 units were found defective and required the following additional costs.
Direct materials Rs. 100
Direct labour Rs. 200
Factory overhead 100% of direct labour
On final inspection, 2 units were classified as spoiled and sold for Rs. 90. The good units were dispatched to the customer at a price of Rs.240 per unit.
Instructions: Pass
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