AFAR 2303A

COST ACCOUNTING: JOB ORDER (SPOILAGE & REWORK)

Instructor & Content Author: DAVE U. CERVAS, CPA U.S. CMA CTT MRITax

Problem 9. NOP Company's Job 921 manufactured 13,750 units that was completed in August
at unit costs presented as follows:
Direct materials P50
Direct labor 45
Factory overhead (includes an allowance of P2.50
Spoiled work) 45
Final inspection of Job 921 disclosed 1,250 spoiled units, which were sold for P37,500.
What would be the unit cost of good units if the spoilage loss is attributable to exacting
specifications of Job747?

A. P137.50
B. P143.75
C. P140.00
D. P148.25

Problem 10. During August 2012, Faithfully Inc. incurred the following costs for Job 522 (450
drum sets):
Direct materials P42,500
Direct labor P65,250
Factory overhead P78,300

45 units of drum sets were found to be defective and Faithfully Inc. had to incur the following to
remedy the said defects:
Direct materials P13,550
Direct labor P15,250

If the rework cost is normal but specific to Job 522, the cost per finished unit is:
A. P518.11
B. P497.75
C. P575.68
D. P484.22