Miracles Manufacturing Co. manufactures a lifting equipment. One order from Heaven Company for 3,000 lifting equipment showed the following cost per unit; materials P35.00; labor P20.00; FOH applied at 150% of direct labor cost which includes a 10% allowance for reworking defective units. Final inspection showed that 250 units were not properly produced. Correction for each defective unit requires P3.50 for materials, P4.00 for labor and FOH at the appropriate rate. Assuming the defective units are the result of internal failure, how much is the cost of goods manufactured?

Miracles Manufacturing Co. manufactures a lifting equipment. One order from Heaven Company for 3,000 lifting equipment showed the following cost per unit; materials P35.00; labor P20.00; FOH applied at 150% of direct labor cost which includes a 10% allowance for reworking defective units. Final inspection showed that 250 units were not properly produced. Correction for each defective unit requires P3.50 for materials, P4.00 for labor and FOH at the appropriate rate. Assuming the defective units are the result of internal failure, how much is the cost of goods manufactured?

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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