Rowe Co.'s Job 401 for the manufacture of 2,200 wagons was completed during August at the unit costs presented below. Final inspection of Job 401 disclosed 200 spoiled wagons that were sold to a jobber for $6,000. Assume that spoilage loss is attributable to the exacting specifications of Job 401 and is charged to this specific job. What would be the unit cost of the good wagons produced on Job 401?

Question

Rowe Co.'s Job 401 for the manufacture of 2,200 wagons was completed during August at the unit costs presented below. Final inspection of Job 401 disclosed 200 spoiled wagons that were sold to a jobber for $6,000.  Assume that spoilage loss is attributable to the exacting specifications of Job 401 and is charged to this specific job. What would be the unit cost of the good wagons produced on Job 401?

Quizplus · Accepted Answer

When the spoilage loss is charged to the specific job on which the spoilage occurred, the cost of producing the good units includes the cost of producing all units less the amount received for the spoilage:
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Rowe Co'S Job 401 for the Manufacture of 2,200 Wagons Was