(Defective units and rework) Terrell Corporation produces plastic pipe and ac¬ counts for its production process using weighted average process costing. Ma¬ terial is added at the beginning of production. The company applies overhead to products using machine hours. Terrell Corporation used the following infor¬ mation in setting its predetermined overhead rate for 1997:

Terrell Corporation sells pipe for $3.50 per foot.

a. Determine the overhead application rate for 1997.

b. Determine the cost per pipe-foot for production in 1997.

c. Assume that the rework is normal and those units can be sold for the regular selling price. How will Terrell Corporation account for the $37,750 of re¬ work cost?

d. Assume that the rework is normal, but the reworked pipe is irregular and can only be sold for $2.50 per foot. Prepare the journal entry to establish the inventory account for the reworked pipe. What is the total cost per unit for the good output completed?

e. Assume that 20 percent of the rework is abnormal and that all reworked output is irregular and can be sold for only $2.50 per foot. Prepare the journal entry to establish the inventory account for the reworked pipe. What is the total cost per foot for the good output completed during 1997?LO1

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Expected overhead other than rework Expected rework costs Total expected overhead Expected machine hours for 1997 $425,000 37,500 $462,500 50,000