Cost accounting CPA Question?

During March, Hamilton Company incurred the following costs on Job 10 for the manufacre of 200 motors:
Direct Materials - $330
Direct Labor - $400
Factory Overhead (150% of Direct labor) $600

Original Cost accumulation : (total of above #'s) 1,330

Direct Matreials $50
Direct Labor $80
Direct costs of reworked 10 units (total of above 2 #'s): $130

The rework costs were attributable to exacting specifications of Job 10 and the full rework costs were charged to this specific job. The cost per finished unit of Job 10 was:
A) $7.90
B) $7.30
C) $7.00
D) $6.65


Please Help!!!!!

I need the explanation as well so I can understand it and learn

When you're trying to figure the cost per unit for manufacturing, both rework and spoilage work the same way. You ALWAYS figure the cost based on the number of units that pass inspection.

If you start work on 200 units, and 10 of them fail inspection, your cost per unit is total costs divided by 190 (because you only have 190 good units). There are no exceptions.

If you send the 10 back into the plant and fix them, then your cost per unit is total costs divided by 200 (because you now have 200 good units). Again, no exceptions.

Also, you have to allow the costs to follow the good units. You have to think carefully whether you're using a weighted average cost scheme or FIFO. (This may not apply to your problem.)

Now all you have to do is figure out what costs to apply. When you're applying costs to a specific job, then just add them up. When you're applying the costs of rework or spoilage to all jobs in general, then the costs of both are applied to an allocation account, not to the specific job.

Based on the information you gave, here's what I think the answer is:

Original cost for the motors:

1330 / 190 (before rework)
1460 / 200 (after rework, for costs attributable to specific job)
1330 / 200 (after rework, for costs allocated to all jobs)