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Problem - Nissan Motors accepted an order for 10 units of Urvan Escapade on a job order cost system. Job 3-601 is assigned for this order. The following costs are incurred for the manufacture of the 10 unit:
Materials P5,000,000
Labor (31,250 hrs. x P40) 1,250,000
Overhead 120% of DLC
Final inspection revealed that 2 units required rework due to improper installation of lighting because of the intervention of the customer. The rework required 50 direct labor hours, overhead is applied at the normal rate and an additional lighting materials amounting to P25,000. The units are then billed to the customer at 140% above cost. Compute the billing price per unit of Urvan.
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