Defective units that are not reworked The School Features Company makes briefcases, notebooks, and a number of other school and business related products. All products are produced for general stock in job lot production runs. The company's biggest revenue product is its G-40 molded briefcase. It is sold to wholesalers for $36 per unit.

Below is the job cost sheet for the most recent production run of G-40 briefcases.

Briefcases are manufactured with strict quality control procedures. Occasionally hinges or latches do not meet standards, or there is a flaw in the body of the briefcases. Any cases not satisfying quality control standards are sold as seconds for $10 each. 100 of the 1,000 briefcases produced in Job No. J-5854-G-40 were faulty and were sold as seconds. The job cost sheet above does not reflect any accounting for the defective units.

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Job Cost Sheet Date started Date completed 4/14/92 4/30/92 Product G-40 briefcase Job number Quantity Customer JC-5854-G-40 1,000 General stock Direct Materials Direct Labor Manufacturing Overhead Date Reference Amount Date Reference Amount Date Reference Amount 4/14 MRQ7961 $ 8,000 4/27 LD9874 $ 6,600 4/27 LD9874 $ 3,300 4/22 MRQ7978 4,000 5/04 LD9875 $12,000 3,000 $ 9,600 5/04 LD9875 1,500 $ 4,800 Summary of Costs Item Total Cost Direct materials $12,000 Unit Cost $12.00 Direct labor 9,600 9.60 Manufacturing overhead 4,800 4.80 Totals $26,400 $ 26.40