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War Room Company manufactures fire extinguisher per the design and specification of its customers, and accordingly uses a job order cost system.  In March 2015, it finished 50,000 pieces for a customer at a cost of P1,500 per unit for direct materials and P1,000 per unit for conversion costs.   The production incurred 500 defective units due to an error in the specification made by the customer and had to be reworked at a cost of P200 per unit. No allowance for rework is included in the budgeted overhead. If War Room wants to maintain a 30% gross profit rate, how much is the selling price per unit?

War Room Company manufactures fire extinguisher per the design and specification of its customers, and accordingly uses a job order cost system.  In March 2015, it finished 50,000 pieces for a customer at a cost of P1,500 per unit for direct materials and P1,000 per unit for conversion costs.   The production incurred 500 defective units due to an error in the specification made by the customer and had to be reworked at a cost of P200 per unit. No allowance for rework is included in the budgeted overhead. If War Room wants to maintain a 30% gross profit rate, how much is the selling price per unit?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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War Room Company manufactures fire extinguisher per the design and specification of its customers, and accordingly uses a job order cost system.  In March 2015, it finished 50,000 pieces for a customer at a cost of P1,500 per unit for direct materials and P1,000 per unit for conversion costs.   The production incurred 500 defective units due to an error in the specification made by the customer and had to be reworked at a cost of P200 per unit. No allowance for rework is included in the budgeted overhead.

If War Room wants to maintain a 30% gross profit rate, how much is the selling price per unit?

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