Question
Iwan Company started 300 units in process on job order no. 143. The prime costs placed in process consisted of P60,000 and P36,000 for direct
Iwan Company started 300 units in process on job order no. 143. The prime costs placed in process consisted of P60,000 and P36,000 for direct materials and direct labor, respectively. A predetermined overhead rate of 116 and 2/3% of the direct labor cost was used. Upon completion of the job order, units equal to 20% of the good output were not accepted for failing to meet the standard quality requirements. The company sells the rejected units as scrap at only 1/3 of production cost. Iwan bills customers at 175% of production cost.
1. What is the billing price of job 143 if the rejected units were ascribed to company failure? 2. What is the billing price of job 143 if the rejected units were ascribed to customer action?
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