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Cost of Normal Spoilage Caused by Nature of Job
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 $2,700 and direct labor of $1,300. Overhead is applied at the rate of 110 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 $1,200 and direct labor costing $900.
Problem 1: Calculate the cost of the Tramel job
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