SONA Co. received an order for 1,000 units of item AY-14.  Because of the order’s exacting specifications, it is anticipated that defective and spoiled work will exceed the normal rate.  The materials cost per unit  is P140; labor cost, P200; and factory overhead for this order is to be applied at 80% of the labor cost. During production, 150 units were found to be defective and required the following total additional costs; materials, P3,000, labor, P7,500 and factory overhead at 80% of direct labor cost.  On final inspection, 50 units were classified as seconds and sold for P200 each, the proceeds being credited to the order.  The customer has agreed to accept the good units. How much is the unit cost of the finished products?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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SONA Co. received an order for 1,000 units of item AY-14.  Because of the order’s exacting specifications, it is anticipated that defective and spoiled work will exceed the normal rate.  The materials cost per unit  is P140; labor cost, P200; and factory overhead for this order is to be applied at 80% of the labor cost. During production, 150 units were found to be defective and required the following total additional costs; materials, P3,000, labor, P7,500 and factory overhead at 80% of direct labor cost.  On final inspection, 50 units were classified as seconds and sold for P200 each, the proceeds being credited to the order.  The customer has agreed to accept the good units.

How much is the unit cost of the finished products?

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