Stanley Company instalis granite countertops in customers' homes. First, the customer chooses the particular granite slab, and then Staniey measures the countertop area at the customer's home, cuts the granite to that shape, and installs it. The Flores job cails for direct materials of $2,800 and direct labor of $1,000. Overhead is appled at the rate of 140 percent of direct labor cost. Unfortunately, one small countertop breaks during installation and Staniey must cut another piece and install it to properly complete the job. The additional rework required direct materials costing $1,300 and direct labor costing $1,000. Assume that the spollage 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. Requira: 1. Calculate the cost of the Flores job. x 2. Does a joumal entry to the overhead control account need to be made? 3. What if the addisional remork required $2,000 of direct labor? What would be the effect on the cost of the flores job? If the additionat rework required $2,000 of direct labor rather than $1,000, then the total cost of the Flores job wovld x by x to 5 Stanley Company instalis granite countertops in customers' homes. First, the customer chooses the particular granite slab, and then Staniey measures the countertop area at the customer's home, cuts the granite to that shape, and installs it. The Flores job cails for direct materials of $2,800 and direct labor of $1,000. Overhead is appled at the rate of 140 percent of direct labor cost. Unfortunately, one small countertop breaks during installation and Staniey must cut another piece and install it to properly complete the job. The additional rework required direct materials costing $1,300 and direct labor costing $1,000. Assume that the spollage 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. Requira: 1. Calculate the cost of the Flores job. x 2. Does a joumal entry to the overhead control account need to be made? 3. What if the addisional remork required $2,000 of direct labor? What would be the effect on the cost of the flores job? If the additionat rework required $2,000 of direct labor rather than $1,000, then the total cost of the Flores job wovld x by x to 5
