Review Questions and Exercises Completion Statements Fill in the blank(s) to com

Question

Review Questions and Exercises

Completion Statements

Fill in the blank(s) to complete each statement.

1.      Units of production that do not meet the specifications required by customers for good units and that are discarded or are sold at reduced prices are called _______________.

2.      Units of production that do not meet the specifications required by customers for finished goods that are subsequently repaired and sold as good finished goods are called _______________.

3.      ______________ is residual material that results from manufacturing a product; it has low sales value compared with the total sales value of the product.

4.      _________________________ is inherent in a particular production process that arises even under efficient operating conditions.

5.      The cost of abnormal spoilage is debited to which account? __________________________

6.      Accounting for spoilage or rework in job-costing systems uses what three classifications? _______________________________________

_______________________________________

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Explanation / Answer

1- Units of production that do not meet the specifications required by customers for good units and that are discarded or are sold at reduced prices are called : spoilage

2.      Units of production that do not meet the specifications required by customers for finished goods that are subsequently repaired and sold as good finished goods are called--rework

3-    Scrap is residual material that results from manufacturing a product; it has low sales value compared with the total sales value of the product.

4     Normal Spoilage is inherent in a particular production process that arises even under efficient operating conditions.

5- The cost of abnormal spoilage is debited to which account: loss from normal spoilage account

6- Accounting for spoilage or rework in job-costing systems uses what three classifications: normal spoilage attributable to specific jobs, abnormal spoilage, normal spoilage common to all jobs

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