An inventory item of XYZ Manufacturing has an average daily demand of 10 units with a maximum daily demand of 12 units.

The
economic order quantity is 200 units. Without safety stocks, the reorder point is 50 units. Safety stocks are set at 94 units. Determine
the reorder point with safety stocks. 144

An inventory item of XYZ Manufacturing has an average daily demand of 10 units with a maximum daily demand of 12 units. The
economic order quantity is 200 units. Without safety stocks, the reorder point is 50 units. Safety stocks are set at 94 units. Determine
the maximum inventory level. 294 units

An inventory item of XYZ Manufacturing has an average daily demand of 10 units with a maximum daily demand of 12 units. The
economic order quantity is 200 units. Without safety stocks, the reorder point is 50 units. Safety stocks are set at 94 units. Determine
the average lead time. 5

An inventory item of XYZ Manufacturing has an average daily demand of 10 units with a maximum daily demand of 12 units. The
economic order quantity is 200 units. Without safety stocks, the reorder point is 50 units. Safety stocks are set at 94 units. Determine
the maximum lead time. 12 days

The IBP Grocery orders most of its items in lot sizes of 10 units. Average annual demand per side of beef is 720 units per year.
Ordering costs are P25 per order with an average purchasing price of P100. Annual inventory carrying costs are estimated to be 40%
of the unit cost. Determine the economic order quantity. 30 units

The IBP Grocery orders most of its items in lot sizes of 10 units. Average annual demand per side of beef is 720 units per year.
Ordering costs are P25 per order with an average purchasing price of P100. Annual inventory carrying costs are estimated to be 40%
of the unit cost. Determine the annual cost savings if the shop changes from an order size of 10 units to the economic order quantity. P
800
Harper Co's Job 501 for the manufacture of 2,200 coats, which was completed during August at the unit cost presented below. Final
inspection of Job 501 disclosed 200 spoiled coats which were sold to a jobber for P6,000. The costing are: Direct materials P20; Direct
labor P18; Factory overhead(includes an allowance of P1 for spoiled work) P18. Assume that spoilage loss is charged to all
production during August. What would be the unit cost of the good coats produced on Job 501? P56

Harper Co's Job 501 for the manufacture of 2,200 coats, which was completed during August at the unit cost presented below. Final
inspection of Job 501 disclosed 200 spoiled coats which were sold to a jobber for P6,000. The costing are: Direct materials P20; Direct
labor P18; Factory overhead(includes an allowance of P1 for spoiled work) P18. Using the same information in No. 54, assume
instead that the spoilage loss is attributable to the exacting specifications of Job 501 and is charged to this specific job. What would be
the unit cost of good coats produced on Job 501? P57.50

Under Heller Company's job order cost system, estimated costs of defective work(considered normal in the manufacturing process) are
included in the predetermined factory overhead rate. During March, Job No. 210 for 2,000 hand saws was completed at the following
costs per unit. The costing are : Direct materials P 5; Direct labor P4; Factory Overhead (applied at 150% of direct labor costs) P6.
Final inspection disclosed 100 defective saws, which were reworked at a cost of P2 per unit for direct labor, plus overhead at the
predetermined rate. The defective units fall within the normal range. What is the total rework cost and to what account should it be
charged? P500 to factory overhead control

Gumamela Mfg. Co.started 150 units in process on job order #13. The prime costs placed in a process consisted of P30,000 and
P18,000 for materials and direct labor, respectively, and a pre-determined rate was used to charge factory overhead to production at
133-1/3% of the direct labor cost. Upon completion of the job order, units equal to 20% of the good output were rejected for failing to
meet strict quality control requirements. The company sells rejected units as scrap at only 1/3 of production cost, and bills customers at
150percent of production cost. If the rejected units were ascribed to company failure, the billing price of job order #13 would be:
P90,000

The company incurred the following costs on Job 002 for the 200 units: Original cost accumulation: Direct Materials P 600; Direct labor
P400; Factory OH applied P600. Direct costs of reworking 10 units: Direct materials P 100; Direct labor P100. Unit cost of Job 002 if
rework cost is normal in production P 8
The company incurred the following costs on Job 002 for the 200 units: Original cost accumulation: Direct Materials P
600; Direct labor P400; Factory OH applied P600. Direct costs of reworking 10 units: Direct materials P 100; Direct labor
P100. Unit cost of Job 002 if rework cost is attributable to product specification P 9.75

SPOILED NO MORE COMPANY manufactures products that often require specification changes or modifications to meet customer’s
needs. During the period, the company worked on a particular job with very exacting specifications. Cost per unit for this contract:
Prime costs P 68.8; Conversion costs P 49.8. The cost of material per unit is P 10 more than its labor cost. The production process
requires two inspection points. The first inspection determines the defective units while the second inspection screens the spoiled
units. Unit that develops imperfections in this contract incurs the following rework costs: Direct materials P 35; Direct Labor P 30; and
applied OH P 25. It was discovered in the initial inspection that 12% of the original inputs were defective because of exacting
specifications of the customer. Units that passed the first inspection were immediately transferred to finished goods. Defective units
were subsequently reworked at a total conversion cost of P 3,300. After reworking, the units were finally inspected. Only 10 units
passed the thorough final inspection. The remaining units were considered spoiled and can be sold for P 64 per unit as “seconds”.
Because spoilage is inevitable, the customer has agreed to accept the remaining goods units instead of the quantity originally ordered.
When the job was completed, the invoice was mailed to the customer. It showed an invoice price that included 25% profit based on
cost of the contract. The invoice has a list price P 97,500 subject to 40% trade discount. The customer objected to the billing for the
reason that the billed amount included the cost of spoilage after reworking. The customer stated further that spoilage occurred
because of internal failure, such as an employee error. Hence spoilage cost should not be charged to its order. There were no
inventories for this particular contract. Before any defective or spoiled units, what was the amount credited to applied OH 10,200

SPOILED NO MORE COMPANY manufactures products that often require specification changes or modifications to meet customer’s
needs. During the period, the company worked on a particular job with very exacting specifications. Cost per unit for this contract:
Prime costs P 68.8; Conversion costs P 49.8. The cost of material per unit is P 10 more than its labor cost. The production process
requires two inspection points. The first inspection determines the defective units while the second inspection screens the spoiled
units. Unit that develops imperfections in this contract incurs the following rework costs: Direct materials P 35; Direct Labor P 30; and
applied OH P 25. It was discovered in the initial inspection that 12% of the original inputs were defective because of exacting
specifications of the customer. Units that passed the first inspection were immediately transferred to finished goods. Defective units
were subsequently reworked at a total conversion cost of P 3,300. After reworking, the units were finally inspected. Only 10 units
passed the thorough final inspection. The remaining units were considered spoiled and can be sold for P 64 per unit as “seconds”.
Because spoilage is inevitable, the customer has agreed to accept the remaining goods units instead of the quantity originally ordered.
When the job was completed, the invoice was mailed to the customer. It showed an invoice price that included 25% profit based on
cost of the contract. The invoice has a list price P 97,500 subject to 40% trade discount. The customer objected to the billing for the
reason that the billed amount included the cost of spoilage after reworking. The customer stated further that spoilage occurred
because of internal failure, such as an employee error. Hence spoilage cost should not be charged to its order. There were no
inventories for this particular contract. Before any defective or spoiled units, what was the amount credited to material 19,700
SPOILED NO MORE COMPANY manufactures products that often require specification changes or modifications to
meet customer’s needs. During the period, the company worked on a particular job with very exacting specifications.
Cost per unit for this contract: Prime costs P 68.8; Conversion costs P 49.8. The cost of material per unit is P 10 more
than its labor cost. The production process requires two inspection points. The first inspection determines the defective
units while the second inspection screens the spoiled units. Unit that develops imperfections in this contract incurs the
following rework costs: Direct materials P 35; Direct Labor P 30; and applied OH P 25. It was discovered in the initial
inspection that 12% of the original inputs were defective because of exacting specifications of the customer. Units that
passed the first inspection were immediately transferred to finished goods. Defective units were subsequently reworked
at a total conversion cost of P 3,300. After reworking, the units were finally inspected. Only 10 units passed the
thorough final inspection. The remaining units were considered spoiled and can be sold for P 64 per unit as “seconds”.
Because spoilage is inevitable, the customer has agreed to accept the remaining goods units instead of the quantity
originally ordered. When the job was completed, the invoice was mailed to the customer. It showed an invoice price
that included 25% profit based on cost of the contract. The invoice has a list price P 97,500 subject to 40% trade
discount. The customer objected to the billing for the reason that the billed amount included the cost of spoilage after
reworking. The customer stated further that spoilage occurred because of internal failure, such as an employee error.
Hence spoilage cost should not be charged to its order. There were no inventories for this particular contract. How
many units were processed 500

SPOILED NO MORE COMPANY manufactures products that often require specification changes or modifications to
meet customer’s needs. During the period, the company worked on a particular job with very exacting specifications.
Cost per unit for this contract: Prime costs P 68.8; Conversion costs P 49.8. The cost of material per unit is P 10 more
than its labor cost. The production process requires two inspection points. The first inspection determines the defective
units while the second inspection screens the spoiled units. Unit that develops imperfections in this contract incurs the
following rework costs: Direct materials P 35; Direct Labor P 30; and applied OH P 25. It was discovered in the initial
inspection that 12% of the original inputs were defective because of exacting specifications of the customer. Units that
passed the first inspection were immediately transferred to finished goods. Defective units were subsequently reworked
at a total conversion cost of P 3,300. After reworking, the units were finally inspected. Only 10 units passed the
thorough final inspection. The remaining units were considered spoiled and can be sold for P 64 per unit as “seconds”.
Because spoilage is inevitable, the customer has agreed to accept the remaining goods units instead of the quantity
originally ordered. When the job was completed, the invoice was mailed to the customer. It showed an invoice price
that included 25% profit based on cost of the contract. The invoice has a list price P 97,500 subject to 40% trade
discount. The customer objected to the billing for the reason that the billed amount included the cost of spoilage after
reworking. The customer stated further that spoilage occurred because of internal failure, such as an employee error.
Hence spoilage cost should not be charged to its order. There were no inventories for this particular contract. How
many defective units 60
SPOILED NO MORE COMPANY manufactures products that often require specification changes or modifications to
meet customer’s needs. During the period, the company worked on a particular job with very exacting specifications.
Cost per unit for this contract: Prime costs P 68.8; Conversion costs P 49.8. The cost of material per unit is P 10 more
than its labor cost. The production process requires two inspection points. The first inspection determines the defective
units while the second inspection screens the spoiled units. Unit that develops imperfections in this contract incurs the
following rework costs: Direct materials P 35; Direct Labor P 30; and applied OH P 25. It was discovered in the initial
inspection that 12% of the original inputs were defective because of exacting specifications of the customer. Units that
passed the first inspection were immediately transferred to finished goods. Defective units were subsequently reworked
at a total conversion cost of P 3,300. After reworking, the units were finally inspected. Only 10 units passed the
thorough final inspection. The remaining units were considered spoiled and can be sold for P 64 per unit as “seconds”.
Because spoilage is inevitable, the customer has agreed to accept the remaining goods units instead of the quantity
originally ordered. When the job was completed, the invoice was mailed to the customer. It showed an invoice price
that included 25% profit based on cost of the contract. The invoice has a list price P 97,500 subject to 40% trade
discount. The customer objected to the billing for the reason that the billed amount included the cost of spoilage after
reworking. The customer stated further that spoilage occurred because of internal failure, such as an employee error.
Hence spoilage cost should not be charged to its order. There were no inventories for this particular contract. How
many spoiled units 10

SPOILED NO MORE COMPANY manufactures products that often require specification changes or modifications to
meet customer’s needs. During the period, the company worked on a particular job with very exacting specifications.
Cost per unit for this contract: Prime costs P 68.8; Conversion costs P 49.8. The cost of material per unit is P 10 more
than its labor cost. The production process requires two inspection points. The first inspection determines the defective
units while the second inspection screens the spoiled units. Unit that develops imperfections in this contract incurs the
following rework costs: Direct materials P 35; Direct Labor P 30; and applied OH P 25. It was discovered in the initial
inspection that 12% of the original inputs were defective because of exacting specifications of the customer. Units that
passed the first inspection were immediately transferred to finished goods. Defective units were subsequently reworked
at a total conversion cost of P 3,300. After reworking, the units were finally inspected. Only 10 units passed the
thorough final inspection. The remaining units were considered spoiled and can be sold for P 64 per unit as “seconds”.
Because spoilage is inevitable, the customer has agreed to accept the remaining goods units instead of the quantity
originally ordered. When the job was completed, the invoice was mailed to the customer. It showed an invoice price
that included 25% profit based on cost of the contract. The invoice has a list price P 97,500 subject to 40% trade
discount. The customer objected to the billing for the reason that the billed amount included the cost of spoilage after
reworking. The customer stated further that spoilage occurred because of internal failure, such as an employee error.
Hence spoilage cost should not be charged to its order. There were no inventories for this particular contract. What was
the total amount of rework costs P5400
SPOILED NO MORE COMPANY manufactures products that often require specification changes or modifications to
meet customer’s needs. During the period, the company worked on a particular job with very exacting specifications.
Cost per unit for this contract: Prime costs P 68.8; Conversion costs P 49.8. The cost of material per unit is P 10 more
than its labor cost. The production process requires two inspection points. The first inspection determines the defective
units while the second inspection screens the spoiled units. Unit that develops imperfections in this contract incurs the
following rework costs: Direct materials P 35; Direct Labor P 30; and applied OH P 25. It was discovered in the initial
inspection that 12% of the original inputs were defective because of exacting specifications of the customer. Units that
passed the first inspection were immediately transferred to finished goods. Defective units were subsequently reworked
at a total conversion cost of P 3,300. After reworking, the units were finally inspected. Only 10 units passed the
thorough final inspection. The remaining units were considered spoiled and can be sold for P 64 per unit as “seconds”.
Because spoilage is inevitable, the customer has agreed to accept the remaining goods units instead of the quantity
originally ordered. When the job was completed, the invoice was mailed to the customer. It showed an invoice price
that included 25% profit based on cost of the contract. The invoice has a list price P 97,500 subject to 40% trade
discount. The customer objected to the billing for the reason that the billed amount included the cost of spoilage after
reworking. The customer stated further that spoilage occurred because of internal failure, such as an employee error.
Hence spoilage cost should not be charged to its order. There were no inventories for this particular contract. Based on
invoice mailed, how much is the unit cost in terms of Materials (3 decimal places) 45.492

SPOILED NO MORE COMPANY manufactures products that often require specification changes or modifications to
meet customer’s needs. During the period, the company worked on a particular job with very exacting specifications.
Cost per unit for this contract: Prime costs P 68.8; Conversion costs P 49.8. The cost of material per unit is P 10 more
than its labor cost. The production process requires two inspection points. The first inspection determines the defective
units while the second inspection screens the spoiled units. Unit that develops imperfections in this contract incurs the
following rework costs: Direct materials P 35; Direct Labor P 30; and applied OH P 25. It was discovered in the initial
inspection that 12% of the original inputs were defective because of exacting specifications of the customer. Units that
passed the first inspection were immediately transferred to finished goods. Defective units were subsequently reworked
at a total conversion cost of P 3,300. After reworking, the units were finally inspected. Only 10 units passed the
thorough final inspection. The remaining units were considered spoiled and can be sold for P 64 per unit as “seconds”.
Because spoilage is inevitable, the customer has agreed to accept the remaining goods units instead of the quantity
originally ordered. When the job was completed, the invoice was mailed to the customer. It showed an invoice price
that included 25% profit based on cost of the contract. The invoice has a list price P 97,500 subject to 40% trade
discount. The customer objected to the billing for the reason that the billed amount included the cost of spoilage after
reworking. The customer stated further that spoilage occurred because of internal failure, such as an employee error.
Hence spoilage cost should not be charged to its order. There were no inventories for this particular contract. Based on
invoice mailed, how much is the unit cost in terms of Labor (3 decimal places) 34.310
SPOILED NO MORE COMPANY manufactures products that often require specification changes or modifications to
meet customer’s needs. During the period, the company worked on a particular job with very exacting specifications.
Cost per unit for this contract: Prime costs P 68.8; Conversion costs P 49.8. The cost of material per unit is P 10 more
than its labor cost. The production process requires two inspection points. The first inspection determines the defective
units while the second inspection screens the spoiled units. Unit that develops imperfections in this contract incurs the
following rework costs: Direct materials P 35; Direct Labor P 30; and applied OH P 25. It was discovered in the initial
inspection that 12% of the original inputs were defective because of exacting specifications of the customer. Units that
passed the first inspection were immediately transferred to finished goods. Defective units were subsequently reworked
at a total conversion cost of P 3,300. After reworking, the units were finally inspected. Only 10 units passed the
thorough final inspection. The remaining units were considered spoiled and can be sold for P 64 per unit as “seconds”.
Because spoilage is inevitable, the customer has agreed to accept the remaining goods units instead of the quantity
originally ordered. When the job was completed, the invoice was mailed to the customer. It showed an invoice price
that included 25% profit based on cost of the contract. The invoice has a list price P 97,500 subject to 40% trade
discount. The customer objected to the billing for the reason that the billed amount included the cost of spoilage after
reworking. The customer stated further that spoilage occurred because of internal failure, such as an employee error.
Hence spoilage cost should not be charged to its order. There were no inventories for this particular contract. Based on
the revised invoice, how much is the unit cost in terms of applied OH (3 decimal places) 20.956

SPOILED NO MORE COMPANY manufactures products that often require specification changes or modifications to
meet customer’s needs. During the period, the company worked on a particular job with very exacting specifications.
Cost per unit for this contract: Prime costs P 68.8; Conversion costs P 49.8. The cost of material per unit is P 10 more
than its labor cost. The production process requires two inspection points. The first inspection determines the defective
units while the second inspection screens the spoiled units. Unit that develops imperfections in this contract incurs the
following rework costs: Direct materials P 35; Direct Labor P 30; and applied OH P 25. It was discovered in the initial
inspection that 12% of the original inputs were defective because of exacting specifications of the customer. Units that
passed the first inspection were immediately transferred to finished goods. Defective units were subsequently reworked
at a total conversion cost of P 3,300. After reworking, the units were finally inspected. Only 10 units passed the
thorough final inspection. The remaining units were considered spoiled and can be sold for P 64 per unit as “seconds”.
Because spoilage is inevitable, the customer has agreed to accept the remaining goods units instead of the quantity
originally ordered. When the job was completed, the invoice was mailed to the customer. It showed an invoice price
that included 25% profit based on cost of the contract. The invoice has a list price P 97,500 subject to 40% trade
discount. The customer objected to the billing for the reason that the billed amount included the cost of spoilage after
reworking. The customer stated further that spoilage occurred because of internal failure, such as an employee error.
Hence spoilage cost should not be charged to its order. There were no inventories for this particular contract. How
much is the list price based on the revised billing P 85,500