KW Inc. manufactured coil over springs for cars. During this year, KW Inc. manufactured 200 units coil over springs. After final inspection, it was determined that 15 units were defective. The cost per unit to rework the defective units were the following: P100 for direct materials, P160 for direct labor and the appropriate factory overhead rate. The following were the unit cost for the 200 coil over springs: Direct materials P800 Direct labor Applied overhead 160% of direct labor cost (150% in case defective units were charged to specific order) P350

KW Inc. manufactured coil over springs for cars. During this year, KW Inc. manufactured 200 units coil over springs. After final inspection, it was determined that 15 units were defective. The cost per unit to rework the defective units were the following: P100 for direct materials, P160 for direct labor and the appropriate factory overhead rate. The following were the unit cost for the 200 coil over springs: Direct materials P800 Direct labor Applied overhead 160% of direct labor cost (150% in case defective units were charged to specific order) P350

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 6PB: Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen...

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Walloon Company produced 150 defective units last month at a unit manufacturing cost of 30. The defective units were discovered before leaving the plant. Walloon can sell them as is for 20 or can rework them at a cost of 15 and sell them at the regular price of 50. What is the total relevant cost of reworking the defective units? a. 2,250 b. 3,000 c. 4,500 d. 6,750
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