(Accounting for scrap) Artistic Lites restores antique stained glass windows. Re¬ gardless of the job, there is always some breakage or improper cuts. This scrap can be sold to amateur stained glass hobbyists. The following estimates are made in setting the predetermined overhead rate for 1998:

Artistic Lites expects to incur approximately 15,000 direct labor hours during 1998.
One job that Artistic Lites worked on during 1998 was a stained glass win¬ dow of a family crest; the job took 63 hours. Direct materials cost $420; direct labor is costed at $20 per hour. The actual cost of the scrap on this job was $55; this scrap was sold for $18.

a. What predetermined overhead rate was set for 1998?

b. What was the cost of the family crest stained glass window?

c. What journal entry is made to record the cost and selling value of the scrap from the family crest stained glass window?LO1

Transcribed Image Text:

Overhead costs other than breakage $124,100 Estimated cost of scrap $8,800 Estimated sales value of scrap (2,400) 6,400 Total estimated overhead $130,500