(Accounting for scrap) Renaissance Creations restores antique stained glass windows. On all jobs, it generates some breakage or improper cuts. This scrap can be sold to amateur stained glass hobbyists. Renaissance Creations expects to incur approximately 30,000 direct labor hours during 2006. The following estimates are made in setting the predetermined overhead rate for 2006:

One job that Renaissance Creations completed during 2006 was a stained glass window of the Soprano family crest that took 126 hours. Direct material cost $210; direct labor is invoiced at $10 per hour. Actual cost of scrap on this job was $27.50; the scrap was sold for $9.

a. What predetermined overhead rate was set for 2006?

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

c. What journal entiy 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 $65,300 Estimated cost of scrap $3,400 Estimated sales value of scrap (1,200) 2,200 Total estimated overhead $67,500