Figure 5-9
The Omega Company manufactures customized motors on a job-order basis. Job 492 is an order for 100 units. It requires the following:
After inspection, 2 units required rework which required 8 additional direct labor hours and $60 of materials.
-Refer to Figure 5-9. If the spoilage was considered normal, what is the cost of job 492?

Question

Figure 5-9
The Omega Company manufactures customized motors on a job-order basis. Job 492 is an order for 100 units. It requires the following:
   After inspection, 2 units required rework which required 8 additional direct labor hours and $60 of materials.
-Refer to Figure 5-9. If the spoilage was considered normal, what is the cost of job 492?

Quizplus · Accepted Answer

If the spoilage is considered normal, the cost of spoilage is absorbed by the job. Therefore, the cost of job 492 would include the spoilage cost, making it $5,500.

Figure 5-9 The Omega Company Manufactures Customized Motors on a Job-Order Basis