Question

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 $1,900 and direct labor of $900. Overhead is applied at the rate of 150 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 $400 and direct labor costing $100. Assume that the spoilage was due to the inherently fragile nature of the piece of stone picked out by the Tramels. Frieling had warned them that the chosen piece could require much more care and potentially additional work. As a result, Frieling considers this spoilage to be caused by the Tramels' job.

Required:
a. Calculate the cost of the Tramel job.
b. Make any needed journal entry to the overhead control account. If an amount box does not require an entry, leave it blank.
c. What if the additional rework required $200 of direct labor? What would be the effect on the cost of the Tramel job?

Answer 1

Step-by-step explanation:

a. direct material = 1900

direct labour = $900

overhead = 150% of direct labour cost

= 1.5 x $900

cost of tramel job

= direct material + direct labour + 1.5x900

= 1900 + 900 + 1350

= $4150

B. Check attachment for answer b

C. An additional 200 dollars would have no effect on the cost of the job.