Zumiez Company produces a small standard component in a process operation. There is a quality control check at the end of processing, and items which fail the check are sold as scrap for P2.80 per unit. The expected rate of rejection is 10%. Normal loss is not given any cost, except that whatever scrap value it has is credited to the process account. The cost of abnormal loss, net of scrap value, is written off to the profit and loss account. Data for April 2015 are as follows: Materials 4,000 units P16,000 Conversion costs 24,000 Output to finished goods 3,000 units Assuming there were no work in process at the beginning and end of the month, what was the full cost of the finished output that passed the quality control check? а. P32,400 b. P33,333
Zumiez Company produces a small standard component in a process operation. There is a quality control check at the end of processing, and items which fail the check are sold as scrap for P2.80 per unit. The expected rate of rejection is 10%. Normal loss is not given any cost, except that whatever scrap value it has is credited to the process account. The cost of abnormal loss, net of scrap value, is written off to the profit and loss account. Data for April 2015 are as follows: Materials 4,000 units P16,000 Conversion costs 24,000 Output to finished goods 3,000 units Assuming there were no work in process at the beginning and end of the month, what was the full cost of the finished output that passed the quality control check? а. P32,400 b. P33,333
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter14: Quality And Environmental Cost Management
Section: Chapter Questions
Problem 27E: Using the Taguchi quality loss function, an average loss of 20 per unit is calculated. During the...
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