the design and specification of its customers, and accordingly uses the job order costing system. In March 2022, it finished 10,000 pieces for a customer at a cost of P50.00 per unit for direct materials and P40.00 per unit for direct labor. Factory overhead is applied at 100% of direct labor cost. The production incurred 500 defective units due to an error in the specifications made by the customer and that had to be reworked at a direct labor cost of P10.00 per unit. If the customer is billed at 25%
the design and specification of its customers, and accordingly uses the job order costing system. In March 2022, it finished 10,000 pieces for a customer at a cost of P50.00 per unit for direct materials and P40.00 per unit for direct labor. Factory overhead is applied at 100% of direct labor cost. The production incurred 500 defective units due to an error in the specifications made by the customer and that had to be reworked at a direct labor cost of P10.00 per unit. If the customer is billed at 25%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Lico, Inc. manufactures item “B500” per the design and specification of its customers, and accordingly uses the
If the customer is billed at 25% above cost, how much is the billing price?
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