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Before being transferred to Finished Goods Inventory, the steel chairs were inspected by Quality Assurance Officers and 40 were found to be spoiled. The
Before being transferred to Finished Goods Inventory, the steel chairs were inspected by Quality Assurance Officers and 40 were found to be spoiled. The spoiled items are too impractical and expensive to rework as it needs to be molded again, however these items can be salvages for P10 each. The company maintains a separate Spoiled Goods Inventory for defective products and chares the unrecoverable cost of spoilage to Factory Overhead Control (FOC) account. Required: (NOTE: NO peso sign, PUT comma) 1. failure. abnormal. Determine the cost to be transferred to Spoiled Goods Inventory. 2. Determine the cost of the job transferred to finished goods if the spoilage was due to internal Determine the cost of the job transferred to finished goods if the spoilage was considered to be 3. 4. Determine the cost of the job transferred to finished goods to the customer if the spoilage was due to sudden change of customer's specification and not by the inspection of the Quality Assurance officers. Question 25 Raghnall Electronics Inc manufactures gauges and instruments for aircraft. During the current year, an order for P2,500 units of a custom design gauge was begun for the Suffolk Aircraft International. The cost incurred on the job are: Materials - P50,000; Labor (2.500 hours x P15 per hour) - P37,500; Factory Overhead (P30 pr direct labor hour) P75,000. Before taking delivery of the gauges, engineers at Suffolk Aircraft changed the design specification. The change requires the replacement of some parts. The material cost was P1 and required 25 minutes for installation in each gauge. The change affected all 2.500 gauges manufactured on the job. Required: (Note: NO peso sign: PUT comma) 1. Cost of job shipped to the customer. 2. Cost of job shipped to the customer if the rework is due to internal failure. job if the rework is considered abnormal. 3. Unit cost of
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