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Suppose a company manufactured kayaks and 100 kayaks were defective at final inspection. The cost to rework them is $2 per unit for direct labor,
Suppose a company manufactured kayaks and 100 kayaks were defective at final inspection. The cost to rework them is $2 per unit for direct labor, plus manufacturing overhead at the budgeted cost rate of 150% of the direct labor cost. This is considered normal rework. What is the total rework cost? Which account should this amount be debited to?
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