Question

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 $2,200 and direct labor of $800. Overhead is applied at the rate of 110 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 $700 and direct labor costing $400. Assume that the spoilage was due to carelessness by a Frieling worker and it is considered to be normal spoilage.

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 $2,200 and direct labor of $800. Overhead is applied at the rate of 110 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 $700 and direct labor costing $400. 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. 2. Make any needed journal entry to the overhead control account. If an amount box does not require an entry, leave it blank. 99 3. What if the additional rework required $800 of direct labor? What would be the effect on the cost of the Tramel job?

Answer 1

Solv. lo computation of cost of the recomel Job" Particular Amount [ Direct materiel Cost २२०० Direct Labour Cost Doo Overhead Applied 000 Total Cost of Job 3880 2. Cost of Rework $ 700 Direct materials Direct Labour Applied overher ($400 x 1.1) $ 400 { 440 TO AL Reworlocost $ 15:40 Journal Eartry." Overhead Control Ac Dr $ 100 To Materiel Acer $700 To Payroll Ac er is 400 The cost of Tramel Job would not be affected Because the Rework Cous Cost was not Pocleted in the cost of Treimel Job. 3.