Question
Carriage Florists operate a flower shop. Because most of their orders are via telephone, numerous orders have to be reworked. The average cost of the
Carriage Florists operate a flower shop. Because most of their orders are via telephone, numerous orders have to be reworked. The average cost of the reworked orders is $4. Of this amount, $2.50 relates to labour costs, $1 for additional flowers, and $.50 for overhead. Yesterday, the shop reworked 32 orders out of 166. The original cost of the 32 orders totalled $480.
a) Prepare the necessary journal entry to record the rework for the day if the shop considers the rework costs to be normal and common to all customer orders.
b) Prepare a journal entry to transfer the 32 reworked units to Finished Goods Inventory when completed
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