The Bedrock Company is a manufacturer of golf clothing. During the month, the company cut and assembled 10,000 golf jackets. One hundred of the jackets did not meet specifications and were considered "seconds." Seconds are sold for P1,000.00 per jacket, whereas first quality jackets sell for P2,500.00. During the month, Work in Process was charged for P3,600,000 of materials, P4,000,000 of labor, and factory overhead is applied at 120% of direct labor (including allowance of 20% of direct labor for spoiled units) Required: Entries required for each of the following conditions: a. Loss due to spoiled work is spread over all jobs. b. Loss due to spoiled work is charged to this specific job. (factory overhead is applied at 100% of direct labor cost C. Compute the unit cost of the good units under (a) and (b)
The Bedrock Company is a manufacturer of golf clothing. During the month, the company cut and assembled 10,000 golf jackets. One hundred of the jackets did not meet specifications and were considered "seconds." Seconds are sold for P1,000.00 per jacket, whereas first quality jackets sell for P2,500.00. During the month, Work in Process was charged for P3,600,000 of materials, P4,000,000 of labor, and factory overhead is applied at 120% of direct labor (including allowance of 20% of direct labor for spoiled units) Required: Entries required for each of the following conditions: a. Loss due to spoiled work is spread over all jobs. b. Loss due to spoiled work is charged to this specific job. (factory overhead is applied at 100% of direct labor cost C. Compute the unit cost of the good units under (a) and (b)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Problem 7
Transcribed Image Text:Chapter 7 Accounting for Materials
205
Problem 7
The Bedrock Company is a manufacturer of golf clothing. During the month, the
company cut and assembled 10,000 golf jackets. One hundred of the jackets did not
meet specifications and were considered "seconds." Seconds are sold for P1,000.00
per jacket, whereas first quality jackets sell for P2,500.00. During the month, Work in
Process was charged for P3,600,000 of materials, P4,000,000 of labor, and factory
overhead is applied at 120% of direct labor (including allowance of 20% of direct
labor for spoiled units)
Required: Entries required for each of the following conditions:
a. Loss due to spoiled work is spread over all jobs.
b. Loss due to spoiled work is charged to this specific job. (factory overhead is
applied at 100% of direct labor cost
C. Compute the unit cost of the good units under (a) and (b)
Prohlem 8
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