Question 1

The costs of normal spoilage are typically included as a component of the costs of good units manufactured.

Accepted Answer

A) True 
 B)False

Question 2

Recognizing the value of scrap in the accounting records is always done at the time the scrap is produced.

Accepted Answer

A) True 
 B)False

Question 3

Colil Computer Systems, Inc., manufactures printer circuit cards. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $300,000 during the month. Work-in-process records revealed that 10,000 card units were started in January, 5,000 card units were complete, and 4,000 card units were spoiled as expected. Ending work-in-process card units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.
-What is the direct material cost assigned to good units completed?

Accepted Answer

A)  $150,000 
B)  $250,000 
C)  $120,000 
D)  $270,000 
A)  $150,000 
B)  $250,000 
C)  $120,000 
D)  $270,000

Question 4

The standard-costing method ________.

Accepted Answer

A)  adds a layer of complexity to the calculation of equivalent-unit costs in a process-costing environment 
B)  makes calculating equivalent-unit costs unnecessary 
C)  requires an analysis of the spoilage costs in beginning inventory 
D)  requires an analysis of the spoilage costs in ending inventory 
A)  adds a layer of complexity to the calculation of equivalent-unit costs in a process-costing environment 
B)  makes calculating equivalent-unit costs unnecessary 
C)  requires an analysis of the spoilage costs in beginning inventory 
D)  requires an analysis of the spoilage costs in ending inventory

Question 5

Explain the meaning of the terms spoilage,scrap,and rework.Provide an example of each.Is it possible for a single firm to have all three from a single productive process?

Accepted Answer

Spoilage is units of production that do

Question 6

Which of the following statements is true of normal spoilage?

Accepted Answer

A)  It is a spoilage which is not inherent in a particular production process. 
B)  It occurs due to machine breakdowns and operator errors. 
C)  It is usually regarded as avoidable and controllable. 
D)  It arises even when the process is carried out in an efficient manner. 
A)  It is a spoilage which is not inherent in a particular production process. 
B)  It occurs due to machine breakdowns and operator errors. 
C)  It is usually regarded as avoidable and controllable. 
D)  It arises even when the process is carried out in an efficient manner.

Question 7

Answer the following questions using the information below:
Fish Fillet Incorporated obtains fish and then processes them into frozen fillets and then prepares the frozen fish fillets for distribution to its retail sales department. Direct materials are added at the initiation of the cycle. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some fillets are spoiled due to nondetectible defects. Inspection occurs when units are 50% converted. Spoiled fillets generally constitute 4% of the good fillets. Data for April 2015 are as follows:
 $\begin{array} { l  }
 \text {WIP, beginuing inventory 4/1/2015 }& \text { 85,000 fillets} \ \text {Direct materials (100\% complete) }\ \text {Conversion costs ( $ 50 \% $ complete) }\
\text { Started during April } & 130,000 \text { fillets } \
\text { Completed and transferred out } 4 / 31 / 2015 & 180,000 \text { fillets } \
\text { WIP, ending inventory } 4 / 31 / 2015 & 22,000 \text { fillets }\
 \text {Direct materials ( $ 100 \% $ complete) }&\ \text { Conversion costs ( $ 20 \% $ complete) }\
\\text { Costs for April: }\
\text { WIP, beginuning Inventory: }\
 \text { Direct materials } & \$ 130,000 \
\text { Conversion costs } & 95,910 \
\text { Direct materials added } & 300,000 \
\text { Conversion costs added } & 383,130
\end{array}$

-Normal spoilage totals ________.

Accepted Answer

A)  7,200 units 
B)  0 units 
C)  13,000 units 
D)  5,800 units 
A)  7,200 units 
B)  0 units 
C)  13,000 units 
D)  5,800 units

Question 8

When the amount of scrap is material and the scrap is sold immediately after it is produced,which of the following is the journal entry if the scrap attributable to a specific job is sold on account?

Accepted Answer

A)  Scrap Revenues
 Accounts Payable 
B)  Work-in-Process Control 
Accounts Receivable 
C)  Accounts Receivable 
Work-in-Process Control 
D)  Work-in-Process Control 
Accounts Payable 
A)  Scrap Revenues
 Accounts Payable 
B)  Work-in-Process Control 
Accounts Receivable 
C)  Accounts Receivable 
Work-in-Process Control 
D)  Work-in-Process Control 
Accounts Payable

Question 9

How do job-costing systems account for spoilage?

Accepted Answer

Normal spoilage specific to a job is ass

Question 10

Which of the following is an example of spoilage?

Accepted Answer

A)  short lengths from woodworking operations 
B)  edges from plastic molding operations 
C)  defective units of laptops detected after the production process but reworked before the units are sold as good products to customers 
D)  defective aluminum cans sold to aluminum manufacturers for remelting to produce other aluminum products 
A)  short lengths from woodworking operations 
B)  edges from plastic molding operations 
C)  defective units of laptops detected after the production process but reworked before the units are sold as good products to customers 
D)  defective aluminum cans sold to aluminum manufacturers for remelting to produce other aluminum products

Question 11

Normal spoilage costs are usually deducted from the costs of good units.

Accepted Answer

A) True 
 B)False

Question 12

Rework is finished production that is NOT in accordance with customer desires.The product is redone and sold as finished goods.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of scrap?

Accepted Answer

A)  short lengths from woodworking operations 
B)  defective units of laptops detected after the production process but reworked before the units are sold as good products to customers 
C)  defective aluminum cans sold to aluminum manufacturers for remelting to produce other aluminum products 
D)  defective shirts, jeans, shoes, and carpeting sold as seconds 
A)  short lengths from woodworking operations 
B)  defective units of laptops detected after the production process but reworked before the units are sold as good products to customers 
C)  defective aluminum cans sold to aluminum manufacturers for remelting to produce other aluminum products 
D)  defective shirts, jeans, shoes, and carpeting sold as seconds

Question 14

Normal spoilage rates are computed by dividing units of normal spoilage by total good units completed,NOT total actual units started in production.

Accepted Answer

A) True 
 B)False

Question 15

Rework is residual material that results from manufacturing a product and can have either a high or low sales value relative to the product with which it is associated.

Accepted Answer

A) True 
 B)False

Question 16

Rework refers to ________.

Accepted Answer

A)  units of production that do not meet the specifications required by customers but that are subsequently repaired and sold as good finished units 
B)  products of a joint production process that have low total sales values relative to the total sales value of the main product 
C)  units of production whether fully or partially completed, that do not meet the specifications required by customers for good units and are discarded or sold at reduced prices 
D)  residual material that results from manufacturing a product 
A)  units of production that do not meet the specifications required by customers but that are subsequently repaired and sold as good finished units 
B)  products of a joint production process that have low total sales values relative to the total sales value of the main product 
C)  units of production whether fully or partially completed, that do not meet the specifications required by customers for good units and are discarded or sold at reduced prices 
D)  residual material that results from manufacturing a product

Question 17

Line operators and other plant personnel generally can decrease or eliminate normal spoilage by identifying the reasons for machine breakdowns,operator errors.

Accepted Answer

A) True 
 B)False

Question 18

To simplify calculations under FIFO,spoiled units are accounted for as if they were started in the current period.

Accepted Answer

A) True 
 B)False

Question 19

Answer the following questions using the information below:
Fish Fillet Incorporated obtains fish and then processes them into frozen fillets and then prepares the frozen fish fillets for distribution to its retail sales department. Direct materials are added at the initiation of the cycle. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some fillets are spoiled due to nondetectible defects. Inspection occurs when units are 50% converted. Spoiled fillets generally constitute 4% of the good fillets. Data for April 2015 are as follows:
 $\begin{array} { l  }
 \text {WIP, beginuing inventory 4/1/2015 }& \text { 85,000 fillets} \ \text {Direct materials (100\% complete) }\ \text {Conversion costs ( $ 50 \% $ complete) }\
\text { Started during April } & 130,000 \text { fillets } \
\text { Completed and transferred out } 4 / 31 / 2015 & 180,000 \text { fillets } \
\text { WIP, ending inventory } 4 / 31 / 2015 & 22,000 \text { fillets }\
 \text {Direct materials ( $ 100 \% $ complete) }&\ \text { Conversion costs ( $ 20 \% $ complete) }\
\\text { Costs for April: }\
\text { WIP, beginuning Inventory: }\
 \text { Direct materials } & \$ 130,000 \
\text { Conversion costs } & 95,910 \
\text { Direct materials added } & 300,000 \
\text { Conversion costs added } & 383,130
\end{array}$

-What is the amount of direct materials and conversion costs assigned to ending work in process using the weighted-average process-costing method?

Accepted Answer

A)  $26,720; $25,020 
B)  $44,000 $15,840 
C)  $83,600; $88,000 
D)  $88,000; $25,080 
A)  $26,720; $25,020 
B)  $44,000 $15,840 
C)  $83,600; $88,000 
D)  $88,000; $25,080

Question 20

Identify the appropriate order of the following steps in the procedure for process costing with spoilage.
 a. summarize total costs to account for
b. assign total costs to units completed, to spoiled units, and to units in ending inventory
c. summarize the flow of physical units
d. compute output in terms of equivalent units
e. compute cost per equivalent unit
Step 1___
Step 2___
Step 3___
Step 4___
Step 5___

Accepted Answer

The answer of Identify the appropriate order of the following...

The costs of normal spoilage are typically included as a component of the costs of good units manufactured.

Recognizing the value of scrap in the accounting records is always done at the time the scrap is produced.

The standard-costing method ________.

Explain the meaning of the terms spoilage,scrap,and rework.Provide an example of each.Is it possible for a single firm to have all three from a single productive process?

Which of the following statements is true of normal spoilage?

When the amount of scrap is material and the scrap is sold immediately after it is produced,which of the following is the journal entry if the scrap attributable to a specific job is sold on account?

How do job-costing systems account for spoilage?

Which of the following is an example of spoilage?

Normal spoilage costs are usually deducted from the costs of good units.

Rework is finished production that is NOT in accordance with customer desires.The product is redone and sold as finished goods.

Which of the following is an example of scrap?

Normal spoilage rates are computed by dividing units of normal spoilage by total good units completed,NOT total actual units started in production.

Rework is residual material that results from manufacturing a product and can have either a high or low sales value relative to the product with which it is associated.

Rework refers to ________.

Line operators and other plant personnel generally can decrease or eliminate normal spoilage by identifying the reasons for machine breakdowns,operator errors.

To simplify calculations under FIFO,spoiled units are accounted for as if they were started in the current period.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

Filters

Exam 18: Spoilage, rework, and Scrap

The costs of normal spoilage are typically included as a component of the costs of good units manufactured.

Recognizing the value of scrap in the accounting records is always done at the time the scrap is produced.

The standard-costing method ________.

Explain the meaning of the terms spoilage,scrap,and rework.Provide an example of each.Is it possible for a single firm to have all three from a single productive process?

Which of the following statements is true of normal spoilage?

When the amount of scrap is material and the scrap is sold immediately after it is produced,which of the following is the journal entry if the scrap attributable to a specific job is sold on account?

How do job-costing systems account for spoilage?

Which of the following is an example of spoilage?

Normal spoilage costs are usually deducted from the costs of good units.

Rework is finished production that is NOT in accordance with customer desires.The product is redone and sold as finished goods.

Which of the following is an example of scrap?

Normal spoilage rates are computed by dividing units of normal spoilage by total good units completed,NOT total actual units started in production.

Rework is residual material that results from manufacturing a product and can have either a high or low sales value relative to the product with which it is associated.

Rework refers to ________.

Line operators and other plant personnel generally can decrease or eliminate normal spoilage by identifying the reasons for machine breakdowns,operator errors.

To simplify calculations under FIFO,spoiled units are accounted for as if they were started in the current period.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

Filters