Question 1

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 2

In general,it is presumed that normal spoilage occurs halfway between the beginning of the production process and the inspection point in the production cycle.This is because there is no easy way to determine where the spoilage has happened until the inspection has occurred.

Accepted Answer

A) True 
 B)False

Question 3

Reworked goods are unacceptable units of production usually NOT capable of being repaired or converted into a salable product.

Accepted Answer

A) True 
 B)False

Question 4

A company produces 11,000 units of which 600 are spoiled units because the process,even though carefully and efficiently executed is unable to produce good units 100% of the time.Another 80 units are spoiled because machines broke down and there also were operator errors.What is the normal spoilage rate (round to two decimal places)

Accepted Answer

A) 6)18% 
B) 5)81% 
C) 5)45% 
D) 0)73% 
A) 6)18% 
B) 5)81% 
C) 5)45% 
D) 0)73%

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 is an example of spoilage?

Accepted Answer

A) short lengths from woodworking operations that cannot be used to make another product 
B) edges from plastic molding operations that result from the main product's manufacturing process but have little or no value 
C) defective units of laptops detected after the production process but reworked before the units are sold as good products to customers 
D) defective men's button down cotton collar dress shirts that have small pulls in the material and must be sold as discounted "seconds" in the factory store 
A) short lengths from woodworking operations that cannot be used to make another product 
B) edges from plastic molding operations that result from the main product's manufacturing process but have little or no value 
C) defective units of laptops detected after the production process but reworked before the units are sold as good products to customers 
D) defective men's button down cotton collar dress shirts that have small pulls in the material and must be sold as discounted "seconds" in the factory store

Question 7

Spoilage that is an inherent result of the particular production process and arises even under efficient operating conditions is referred to as ________.

Accepted Answer

A) incremental spoilage 
B) normal spoilage 
C) irregular spoilage 
D) direct spoilage 
A) incremental spoilage 
B) normal spoilage 
C) irregular spoilage 
D) direct spoilage

Question 8

When assigning costs,job-costing systems generally distinguish normal spoilage attributable to a specific job from normal spoilage common to all jobs.

Accepted Answer

A) True 
 B)False

Question 9

For each of the following items identify whether it is spoilage,reworked units,or scrap.

Accepted Answer

a.spoilage
b.scrap
c.scrap
d.s

Question 10

Spoilage is typically assumed to occur at the stage of completion where inspection takes place.

Accepted Answer

A) True 
 B)False

Question 11

Costs in beginning inventory are pooled with costs in the current period when determining the costs of good units under the weighted-average method of process costing.

Accepted Answer

A) True 
 B)False

Question 12

The Peric Manufacturing Shop produces motorcycle parts.Typically,17 pieces out of a job lot of 1200 parts are spoiled.Costs are assigned at the inspection point,$60.00 per unit.Spoiled pieces may be disposed at $8.00 per unit.The spoiled goods must be inventoried appropriately when the normal spoilage is detected.The current job requires the production of 3600 good parts.
Which of the following journal entries would be correct if the spoilage occurred due to specifications required for Job 101?

Accepted Answer

C
Explanat

Question 13

Outose Concept manufactures small tables in its Processing Department.Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit.Conversion costs are incurred evenly throughout the production cycle.Before inspection,some units are spoiled due to undetectable materials defects.Spoiled units generally constitute 3% of the good units.Data for December 2017 are as follows:
 
Costs for December:
 
Abnormal spoilage totals ________.

Accepted Answer

A) 2430 units 
B) 8100 units 
C) 5913 units 
D) 2187 units 
A) 2430 units 
B) 8100 units 
C) 5913 units 
D) 2187 units

Question 14

The Duolane Pottery manufactures pottery products.All direct materials are included at the inception of the production process.For April,there was no beginning inventory in the processing plant.Direct materials totaled $180,000 for the month.Work-in-process records revealed that 3,000 tons were started in April and that 2,100 tons were finished;500 tons were spoiled as expected.Ending work-in-process units are complete in respect to direct materials costs.Spoilage is not detected until the process is complete.
Required:
a.What is the cost per equivalent unit?
b.What are the costs assigned to completed units?
c.What are the costs transferred out?
d.What are the amounts allocated to the work-in-process ending inventory?

Accepted Answer

a.
 @#IMG-DLM&_TB5540_00_TB5540_00 b.Ass

Question 15

Which of the following sentences is true of normal spoilage and abnormal spoilage?

Accepted Answer

A) Normal spoilage costs are inventoriable and are added to the cost of good units produced,while abnormal spoilage costs are deducted from the cost of good units produced. 
B) Abnormal spoilage costs are inventoriable and are deducted from the cost of good units produced,while normal spoilage costs are expensed in the accounting period in which they occur. 
C) Abnormal spoilage costs are inventoriable and are added to the cost of good units produced,while normal spoilage costs are expensed in the accounting period in which they occur. 
D) Normal spoilage costs are inventoriable and are deducted from the cost of good units produced,while abnormal spoilage costs are expensed in the accounting period in which they occur. 
A) Normal spoilage costs are inventoriable and are added to the cost of good units produced,while abnormal spoilage costs are deducted from the cost of good units produced. 
B) Abnormal spoilage costs are inventoriable and are deducted from the cost of good units produced,while normal spoilage costs are expensed in the accounting period in which they occur. 
C) Abnormal spoilage costs are inventoriable and are added to the cost of good units produced,while normal spoilage costs are expensed in the accounting period in which they occur. 
D) Normal spoilage costs are inventoriable and are deducted from the cost of good units produced,while abnormal spoilage costs are expensed in the accounting period in which they occur.

Question 16

You are the chief financial officer of a lumber mill,and you are becoming quite concerned about the spoilage,scrap,and reworked items associated with your production processes.Your firm produces mainly products for the building industry.
Required:
Discuss the problems associated with these items and the methods your company can use to reduce spoilage,scrap,and reworked items.

Accepted Answer

The problems associated with these items

Question 17

Which of the following best describes scrap?

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) residual material that results from manufacturing a product 
D) 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 
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) residual material that results from manufacturing a product 
D) 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

Question 18

Scrap and rework are considered to be the same thing by managerial accountants.

Accepted Answer

A) True 
 B)False

Question 19

Under the FIFO method,all spoilage costs are assumed to be related to the units ________.

Accepted Answer

A) in beginning inventory,plus the units completed during the period 
B) completed during the period,using the unit costs of that period 
C) in ending inventory 
D) in both beginning and ending inventory plus the units completed during the period 
A) in beginning inventory,plus the units completed during the period 
B) completed during the period,using the unit costs of that period 
C) in ending inventory 
D) in both beginning and ending inventory plus the units completed during the period

Question 20

Normal spoilage is spoilage that is NOT considered to be inherent in a production process.

Accepted Answer

A) True 
 B)False

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

In general,it is presumed that normal spoilage occurs halfway between the beginning of the production process and the inspection point in the production cycle.This is because there is no easy way to determine where the spoilage has happened until the inspection has occurred.

Reworked goods are unacceptable units of production usually NOT capable of being repaired or converted into a salable product.

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 is an example of spoilage?

Spoilage that is an inherent result of the particular production process and arises even under efficient operating conditions is referred to as ________.

When assigning costs,job-costing systems generally distinguish normal spoilage attributable to a specific job from normal spoilage common to all jobs.

For each of the following items identify whether it is spoilage,reworked units,or scrap.

Spoilage is typically assumed to occur at the stage of completion where inspection takes place.

Costs in beginning inventory are pooled with costs in the current period when determining the costs of good units under the weighted-average method of process costing.

Which of the following sentences is true of normal spoilage and abnormal spoilage?

Which of the following best describes scrap?

Scrap and rework are considered to be the same thing by managerial accountants.

Under the FIFO method,all spoilage costs are assumed to be related to the units ________.

Normal spoilage is spoilage that is NOT considered to be inherent in a production process.

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

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

In general,it is presumed that normal spoilage occurs halfway between the beginning of the production process and the inspection point in the production cycle.This is because there is no easy way to determine where the spoilage has happened until the inspection has occurred.

Reworked goods are unacceptable units of production usually NOT capable of being repaired or converted into a salable product.

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 is an example of spoilage?

Spoilage that is an inherent result of the particular production process and arises even under efficient operating conditions is referred to as ________.

When assigning costs,job-costing systems generally distinguish normal spoilage attributable to a specific job from normal spoilage common to all jobs.

For each of the following items identify whether it is spoilage,reworked units,or scrap.

Spoilage is typically assumed to occur at the stage of completion where inspection takes place.

Costs in beginning inventory are pooled with costs in the current period when determining the costs of good units under the weighted-average method of process costing.

Which of the following sentences is true of normal spoilage and abnormal spoilage?

Which of the following best describes scrap?

Scrap and rework are considered to be the same thing by managerial accountants.

Under the FIFO method,all spoilage costs are assumed to be related to the units ________.

Normal spoilage is spoilage that is NOT considered to be inherent in a production process.

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