Cost of Normal Spoilage Frieling Company installs granite countertops in customers' homes. First, the customer chooses the particular granite slab, and then Frieling measures the countertop area at the customer's home, cuts the granite to that shape, and installs it. The Tramel job calls for direct materials of $2,500 and direct labor of $500. Overhead is applied at the rate of 140 percent of direct labor cost. Unfortunately, one small countertop breaks during installation and Frieling must cut another piece and install it to properly complete the job. The additional rework required direct materials costing $1,000 and direct labor costing $700. Assume that the spoilage was due to carelessness by a Frieling worker and it is considered to be normal spoilage. Required: 1. Calculate the cost of the Tramel job. 3,700 Feedback ►Check My Work 2. Make any needed journal entry to the overhead control account. If an amount box does not require an entry, leave it blank. Overhead Control Materials Payroll Feedback ▼Check My Work See Cornerstone 5.4. 500 X 0☑ 400 X 0 100 X 3. What if the additional rework required $1,400 of direct labor? What would be the effect on the cost of the Tramel job? The cost of the Tramel job would not be affected.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter6: Process Costing

Section: Chapter Questions

Problem 12E: A local barbershop cuts the hair of 1,200 customers per month. The clients are men, and the barbers...

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5.04 Cost of Normal Spoilage additional rework required direct materials costing $1,000 and direct labor costing $700. Assume that the spoilage was due to carelessness by a Frieling worker and it is considered to be normal spoilage. Required: Calculate the cost of the Tramel job. $ Feedback Check My Work Make any needed journal entry to the overhead control account. If an amount box does not require an entry, leave it blank. V Check My Work See Cornerstone 5.4. What if the additional rework required $1,400 of direct labor? What would be the effect on the cost of the Tramel job?