The Teal Company manufactures customized fabric yarns on a job-order basis. Job 450 is an order for 150 units. It requires the following: $$\begin{array} { l r }
\text { Direct materials } & \$ 4,000 \
\text { Direct lab or } ( \$ 10 / \mathrm { hr } ) & 2,000 \
\text { Overhead } ( 150 \text { percent of direct labor cost } ) & 3,000
\end{array}$$
After inspection, 3 units required rework which required 6 additional direct labor hours and $50 of materials.
If the spoilage was considered normal, what is the cost of job 450?
A)$9,000
B)$5,000
C)$7,000
D)$11,000

Question

The Teal Company manufactures customized fabric yarns on a job-order basis. Job 450 is an order for 150 units. It requires the following: $$\begin{array} { l r } 
\text { Direct materials } & \$ 4,000 \
\text { Direct lab or } ( \$ 10 / \mathrm { hr } ) & 2,000 \
\text { Overhead } ( 150 \text { percent of direct labor cost } ) & 3,000
\end{array}$$
After inspection, 3 units required rework which required 6 additional direct labor hours and $50 of materials.
If the spoilage was considered normal, what is the cost of job 450?
A)$9,000
B)$5,000
C)$7,000
D)$11,000

Quizplus · Accepted Answer

The cost of job 450 includes direct materials ($4,000), direct labor ($2,000), and overhead ($3,000). The rework cost for normal spoilage is also included, which is $50 for materials and $60 for labor (6 hours x $10/hour). Total cost = $4,000 + $2,000 + $3,000 + $50 + $60 = $9,110. However, since the choices do not include $9,110, the closest and most logical choice is $9,000, assuming a rounding or estimation in the options.

The Teal Company Manufactures Customized Fabric Yarns on a Job-Order