4. Leyton Company manufactures hollow blocks to customer specifications and uses a job order system. A...

 

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4. Leyton Company manufactures hollow blocks to customer specifications and uses a job order system. A recent order from Fifteen Company was for 10,000 blocks, and the job was assigned number BA116. The job cost sheet for #BA116 revealed the following: Direct materials Direct labor Overhead WIP- Job #BA116 20,400 24,600 18,450 Final inspection of the 10,000 blocks revealed that 220 were defective. In correcting the defects, an additional 4 of cost per unit was incurred (1.50 for direct material and $2.50 for direct labor). After the defects were cured, the blocks were included with the other good units and shipped to the customer. a) Assuming the rework costs are normal but specific to this job, show the journal entry to record the incurrence of the rework costs. Compute for the total cost at completion of the job. Show your solution. b) Assuming the company has a predetermined overhead rate that includes normal rework costs, show the journal entry to record incurrence of the rework costs. Compute for the total cost at completion of the job. Show your solution. c) Assuming the rework costs are abnormal, show the journal entry to record incurrence of the rework costs. Compute for the total cost at completion of the job. Show your solution. 4. Leyton Company manufactures hollow blocks to customer specifications and uses a job order system. A recent order from Fifteen Company was for 10,000 blocks, and the job was assigned number BA116. The job cost sheet for #BA116 revealed the following: Direct materials Direct labor Overhead WIP- Job #BA116 20,400 24,600 18,450 Final inspection of the 10,000 blocks revealed that 220 were defective. In correcting the defects, an additional 4 of cost per unit was incurred (1.50 for direct material and $2.50 for direct labor). After the defects were cured, the blocks were included with the other good units and shipped to the customer. a) Assuming the rework costs are normal but specific to this job, show the journal entry to record the incurrence of the rework costs. Compute for the total cost at completion of the job. Show your solution. b) Assuming the company has a predetermined overhead rate that includes normal rework costs, show the journal entry to record incurrence of the rework costs. Compute for the total cost at completion of the job. Show your solution. c) Assuming the rework costs are abnormal, show the journal entry to record incurrence of the rework costs. Compute for the total cost at completion of the job. Show your solution.

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Leyton Company Job Costing with Rework a Normal Rework Costs Specific to Job Journal Entry Debit Wor... View the full answer