Question

Bamber Kitchens produces a variety of them in accordance with special job orders from hospitals, plant cafeterias, and university dormitories. An order for 2.300 cases of mixed vegetables costs $10 per cas direct materials, $5; direct manufacturing labor, 53, and manufacturing overhead allocated. 52. The manufacturing overhead rate includes a provision for normal sporlage. Consider each requrement independently Read the requirements

Answer 1

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Part 1	Cash	$                                                                                                   460
	Loss from Abnormal Spoilage	$                                                                                               4,140
	Work-in-Process Control (460*$10)		$     4,600
	Remaining cases cost = $10.00 per case. The cost of these cases is unaffected by the loss from abnormal spoilage.
Part 2a	Cash	$                                                                                                   920
	Work-in-Process Control		$         920
	The cost of the remaining good cases =	[($10.00*2,300) – $920]	$   22,080
	The unit cost of a good case	$22,080/1,840	$     12.00
Part 2b	Cash	$                                                                                                   920
	Manufacturing Department Overhead Control	$                                                                                               3,680
	Work-in-Process Control (460*$10)		$     4,600
	The unit cost of a good case remains at $10.00.
Part 2c	The unit costs in 2a and 2b are different because in 2a the normal spoilage cost is charged as a cost of the job which has exacting job specifications
	In 2b however, normal spoilage is due to the production process, not the particular attributes of this specific job
Part 3a	Work-in-Process Control	$                                                                                                   460
	Materials Control, Wages Payable Control,
	Manufacturing Overhead Allocated		$         460
	The cost of the remaining good cases =	[($10.00*2,300) + $460]	$   23,460
	The unit cost of a good case	$23,460/2,500	$        9.38
Part 3b	Manufacturing overheads Control	$                                                                                                   460
	Materials Control, Wages Payable Control,
	Manufacturing Overhead Allocated		$         460
	The unit cost of a good case remains at $10.00.
Part 3c	The unit costs in 3a and 3b are different because in 3a the normal rework cost is charged as a cost of the job which has exacting job specifications.
	In 3b however, normal rework is due to the production process, not the particular attributes of this specific job.