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Question: Ralph Co manufactures products on a job-order basis. Job 4 is an order for 100 units. It requires $3,000 direct materials, $1,000 direct labor, and $1,500 overhead applied based on 150% the direct labor hours. After inspection, 2 units required rework which required $80 additional direct labor costs and $60 of materials.
(1) If the rework is considered normal spoilage due to the nature of the job, determine the cost of Job 4. Prepare the journal entry for overhead.
(2) If the rework is considered normal spoilage, determine the cost of Job 4. Prepare the journal entry for overhead.
(3) If the rework is considered abnormal spoilage, determine the cost of Job 4. Prepare the journal entry for overhead control?
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