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Problem 1: Grace Company manufactures picture frames of all sizes and shapes and uses job-order costing system. There is always some spoilage in each production run. The following costs relate to the current run: P 160,000 Estimated overhead (exclusive of spoilage) Spoilage (estimated) Sales value of spoiled frames Labor hours 25,000 11,500 100,000 The actual cost of a spoiled picture frame is P7.00. During the year, 170 frames are considered spoiled. Each spoiled frame can be sold for P4. The spoilage is considered a part of all jobs (factory overhead). What amount should be debited to Factory Overhead Control to record spoilage pertaining to unrecovered cost?
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