Dynalia Florists Operate a Flower Shop

question 101

Essay

Dynalia Florists operate a flower shop. Because most of their orders are via telephone or fax, numerous orders have to be reworked. The average cost of the reworked orders is $5.25: $3.50 for labor, $1.25 for more flowers, and $0.50 for overhead. This ratio of costs holds for the average original order. On a recent day, the shop reworked 40 orders out of 250. The original cost of the 40 orders totaled $700. The average cost of all orders is $18.34, including rework, with an average selling price of $25.
Required:
Prepare the necessary journal entry to record the rework for the day if the shop charges such activities to Arrangement Department Overhead Control. Prepare a journal entry to transfer the finished goods to Finished Goods Inventory.

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Definitions:

Cost Efficiency

The ability to achieve the desired outcome or production level at the lowest possible cost.

Marketing Channel Power

The degree of influence one entity has over the activities and strategies within a marketing channel, including distribution and communications.

Integrated Supply Chains

Refers to a closely connected and synchronized chain of suppliers, manufacturers, and retailers who work together seamlessly to reduce costs, improve efficiency, and deliver products to consumers.

Sales Promotion Role

The activities or strategies aimed at boosting sales and strengthening market presence temporarily through incentives such as discounts, contests, or free samples.