Darlene, Inc. manufactures item "B500" per the design and specification of its customers, and accordingly uses the job order costing system. In March 2022, it finished 10,000 pieces for a customer at a cost of P50.00 per unit for direct materials and P40.00 per unit for direct labor. Factory overhead is applied at 100% of direct labor cost. The production incurred 500 defective units due to an error in the specifications made by the customer and that had to be reworked at a direct labor cost of P10.00 per unit. If the customer is billed at 25% above cost, how much is the billing price?

Darlene, Inc. manufactures item "B500" per the design and specification of its customers, and accordingly uses the job order costing system. In March 2022, it finished 10,000 pieces for a customer at a cost of P50.00 per unit for direct materials and P40.00 per unit for direct labor. Factory overhead is applied at 100% of direct labor cost. The production incurred 500 defective units due to an error in the specifications made by the customer and that had to be reworked at a direct labor cost of P10.00 per unit. If the customer is billed at 25% above cost, how much is the billing price?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 10E: SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that...

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