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Problem 1: KTH Corp had 10,000 pairs of quality shoes during the year. The following cost per par areas follows; Materials is 200; Direct labor cost is 450 and overhead rate s 125% of DL. Final inspection revealed that 450 pairs were spoiled which was sold at secondhand value of 20,000. The goods were shipped to customer at cost plus 50% markup upon cost. Assuming that the spoilage is due to changes in customer's specifications, what is the mfg. cost per unit/pair?
a. 1,212.50 b. 1,222.50 c. 1,276.54 d. 1,266.45 e. None of the above
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