1. Ashton Paints produces a special paint for manufacturers. Each production run is considered a separate...

1.  

Transcribed Image Text:

1. Ashton Paints produces a special paint for manufacturers. Each production run is considered a separate job because each manufacturer indicates the particular paint specifications it requires. Regardless of the job, there is always some shrinkage because of the mixing process. Clients are billed at 140% of cost. In computing the predetermined overhead rate related to the custom paints, the following estimates are made: Overhead costs other than spoilage Estimated spoilage unit cost Sales of improperly mixed paints to foreign distributors Total estimated overhead Estimated gallons of production during the year $25,800 (5,300) a) Prepare the entry to take up the spoilage. b) At how much per gallon will the above job be billed to Ashley? 150,000 #521,000 20,500 $541,500 During the year, Ashton accepted a job (#38) from Ashley to manufacture 600 gallons of paint. Direct material cost for this job was $35,000 and direct labor cost totaled #28,000. Two percent of the paint became defective during the production process. The defective mixture can be sold for $45.50 per gallon. 1. Ashton Paints produces a special paint for manufacturers. Each production run is considered a separate job because each manufacturer indicates the particular paint specifications it requires. Regardless of the job, there is always some shrinkage because of the mixing process. Clients are billed at 140% of cost. In computing the predetermined overhead rate related to the custom paints, the following estimates are made: Overhead costs other than spoilage Estimated spoilage unit cost Sales of improperly mixed paints to foreign distributors Total estimated overhead Estimated gallons of production during the year $25,800 (5,300) a) Prepare the entry to take up the spoilage. b) At how much per gallon will the above job be billed to Ashley? 150,000 #521,000 20,500 $541,500 During the year, Ashton accepted a job (#38) from Ashley to manufacture 600 gallons of paint. Direct material cost for this job was $35,000 and direct labor cost totaled #28,000. Two percent of the paint became defective during the production process. The defective mixture can be sold for $45.50 per gallon.

Answer rating: 100% (QA)

Ashton Paints Job Costing and Billing a Entry to Record Spoilage Debit Spoilage Loss 1... View the full answer