Answered step by step
Verified Expert Solution
Question
1 Approved Answer
eBook Cost of Normal Spoilage Caused by Nature of Job Stanley Company installs granite countertops in customers' homes. First, the customer chooses the particular
eBook Cost of Normal Spoilage Caused by Nature of Job Stanley Company installs granite countertops in customers' homes. First, the customer chooses the particular granite slab, and then Stanley measures the countertop are at the customer's home, cuts the granite to that shape, and installs it. The Flores job calls for direct materials of $2,600 and direct labor of $700. Overhead is applied at the rate of 100 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 $900 and direct labor costing $250. Assume that the spoilage was due to the inherently fragile nature of the piece of stone picked out by the Flores family. Stanley had warned them that the chosen piece could require much more care and potentially additional work. As a result, Stanley considers this spoilage to be caused by the Flores job. Required: 1. Calculate the cost of the Flores job x 2. Does a journal entry to the overhead control account need to be made? No 3. What if the additional rework required $200 of direct labor? What would be the effect on the cost of the Flores job? If the additional rework required $200 of direct labor rather than $250, then the total cost of the Flores job would decrease x to x
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started