9-34 Job-costing spoilage and scrap. MetalWorks, Inc., manufactures various metal parts in
batches as ordered by customers, and accounts for them using job costing. Job 2346-8, a
large job for customer X, incurred $240,000 of direct materials costs and $620,000 of direct
labor costs. MetalWorks applies overhead at a rate of 150% of direct labor cost.
MetalWorks quoted customer X a fixed price for the job of $2,000,000. The job consisted
of 90,000 good units and 10,000 spoiled units with no rework or disposal value. The job
also created 200 pounds of scrap which can be sold for $3 per pound.
Totalcostsof the job