Reference no: EM132608382

Gujranwala enterprises received an order for manufacture of 500 units of their products Y from Lahore Company. Following costs were incurred for filling the order:

Direct material cost Rs 25,000

Direct labour cost Rs 50,000

Factory overhead applied rate is 50% of direct labour cost.

Additional cost incurred for rework on 50 units found defective were as follow:

Direct materials cost Rs. 2,000

Direct labour cost Rs. 2,000

Factory overhead at applied rate.

Required:

Question 1: Prepare journal enteries to record completion of order when:

(1) Job is charged with cost of defective work.

(2) Cost is not so charged.

(3) Also calculate cost per unit in both of the cases.