Accounting for reworking of defective units. (Obj. 6). In the Finishing

Department of Alamo Reclining Chair Corporation, some re dining chairs are routinely improperly finished and are classified as

"defective." These units are refinished and transferred to Finished

Goods Inventory. In AprU 19X9, 14 chairs were judged to be defective

and were refinished. It is estimated that the refinishing costs applicable

to these chairs are: materials. $280; labor, $640; overhead,

$640. How would these costs be accounted for?

LO.1