Frieling Company installs granite countertops in customers' homes.First, the customer chooses the particular granite slab, and then Frielingmeasures the countertop area at the customer's home, cuts the granite tothat shape, and installs it. The Tramel job calls for direct materials of$1,900 and direct labor of $500. Overhead is applied at the rate of 140 percent of direct labor cost. Unfortunately, one small countertop breaksduring installation and Frieling must cut another piece and install it toproperly complete the job. The additional rework required directmaterials costing $400 and direct labor costing $100. Assume that thespoilage was due to carelessness by a Frieling worker and it isconsidered to be normal spoilage. Refer to the data in Cornerstone Exercise 5.4. Now assume that thespoilage was due to the inherently fragile nature of the piece of stonepicked out by the Tramels. Frieling had warned them that the chosenpiece could require much more care and potentially additional work. Asa result, Frieling considers this spoilage to be caused by the Tramels' job.Required: 1. Calculate the cost of the Tramel job.2. Make any needed journal entry to the overhead control account.3. What if the additional rework required $200 of direct labor?What would be the effect on the cost of the Tramel job?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Frieling Company installs granite countertops in customers' homes.
First, the customer chooses the particular granite slab, and then Frieling
measures the countertop area at the customer's home, cuts the granite to
that shape, and installs it. The Tramel job calls for direct materials of
$1,900 and direct labor of $500.
percent of direct labor cost. Unfortunately, one small countertop breaks
during installation and Frieling must cut another piece and install it to
properly complete the job. The additional rework required direct
materials costing $400 and direct labor costing $100. Assume that the
spoilage was due to carelessness by a Frieling worker and it is
considered to be normal spoilage.
Refer to the data in Cornerstone Exercise 5.4. Now assume that the
spoilage was due to the inherently fragile nature of the piece of stone
picked out by the Tramels. Frieling had warned them that the chosen
piece could require much more care and potentially additional work. As
a result, Frieling considers this spoilage to be caused by the Tramels' job.
Required:
1. Calculate the cost of the Tramel job.
2. Make any needed
3. What if the additional rework required $200 of direct labor?
What would be the effect on the cost of the Tramel job?
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