Robotoys Incorporated Manufactures and Distributes Small Robotic Toys

question 39

Essay

Robotoys Incorporated manufactures and distributes small robotic toys.Reworked units are common.The average cost of the reworked orders is $11.30: $4.15 for labour, $5.00 for more materials, and $2.15 for overhead.This ratio of costs holds for the average original order.On a recent day, the shop reworked 83 orders out of 700.The original cost of the 83 orders totaled $1,909.The average cost of all orders is $24.34, including rework, with an average selling price of $34.50.Required:
Prepare the necessary journal entry to record the rework for the day if the shop charges such activities to Robo Department Overhead Control.Prepare journal entries to record all relevant rework charges as well as to transfer the reworked items finished goods to Finished Goods Inventory.

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Definitions:

Bundle

A combination of goods or services that are considered together as a single aggregate.

Consumer's Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the extra utility gained.

Demand Function

A mathematical equation that describes the relationship between the quantity of a good that consumers are willing and able to purchase and its price.

Supply Function

A mathematical representation showing the amount of goods that producers are willing and able to sell at different prices, graphically depicted as a curve.