Cost of Normal Spoilage

Stanley Company installs granite countertops in customers' homes. First, the customer chooses the particular granite slab, and then Stanley measures the countertop area at the customer's home, cuts the granite to that shape, and installs it. The Flores job calls for direct materials of $2,000 and direct labor of $1,000. Overhead is applied at the rate of 150 percent of direct labor cost. Unfortunately, one small countertop breaks during installation and Stanley must cut another piece and install it to properly complete the job. The additional rework required direct materials costing $500 and direct labor costing $200. Assume that the spoilage was due to carelessness by a Stanley worker and it is considered to be normal spoilage.

Required:

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1. Calculate the cost of the Flores job.

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2. Make any needed journal entry to the overhead control account. If an amount box does not require an entry, leave it blank.

blank	Finished Goods InventoryMaterialsOverhead ControlPayrollWork in Process
	Cost of Goods SoldFinished Goods InventoryMaterialsOverhead ControlWork in Process
	Cost of Goods SoldFinished Goods InventoryOverhead ControlPayrollWork in Process