Fawad Auto Co. Manufactures jacks and other lifting equipment. One order from Pindi Autos for 1,000...

 

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Fawad Auto Co. Manufactures jacks and other lifting equipment. One order from Pindi Autos for 1,000 jacks showed the following costs per unit: (6 Marks) Materials Labour Rs.4 Rs.1.75 Factory overhead applied 160 % of direct labour cost and 150 % when defective unit costs are to be charged to a specific order Final inspection revealed that 75 of the units were improperly made. To correct each defective unit requires Rs.0.20 for materials, Rs.0.30 for labour and factory overhead at the applied rate. Required: Prepare journal entries for all of the described transactions if: a) The order is charged with the cost of defective work. b) Cost of correcting defective work is not charged to a specific order. Fawad Auto Co. Manufactures jacks and other lifting equipment. One order from Pindi Autos for 1,000 jacks showed the following costs per unit: (6 Marks) Materials Labour Rs.4 Rs.1.75 Factory overhead applied 160 % of direct labour cost and 150 % when defective unit costs are to be charged to a specific order Final inspection revealed that 75 of the units were improperly made. To correct each defective unit requires Rs.0.20 for materials, Rs.0.30 for labour and factory overhead at the applied rate. Required: Prepare journal entries for all of the described transactions if: a) The order is charged with the cost of defective work. b) Cost of correcting defective work is not charged to a specific order.

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a Order is charged with the cost of defective work Account Title Debit ... View the full answer