Spoilage, Rework, And Scrap

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Question 1
Free
Multiple Choice

Which of the following defines spoilage?

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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

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

C

residual material that results from manufacturing a product

D

products of a joint production process that have low total sales values relative to the total sales value of the main product

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Question 2
Free
Multiple Choice

Which of the following describes rework?

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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

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Question 3
Free
Multiple Choice

Which of the following is an example of spoilage?

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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

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Question 4
Free
Multiple Choice

Which of the following best describes scrap?

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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

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Question 5
Free
Multiple Choice

A leather shoe manufacturer makes "duck" boots that consist of leather and rubber. Some of the books are defective and are sold in the factory store at deep discounts. Leather strips from the cutting process and rubber shavings are byproducts of the process. The leather strips have no use and are discarded while the rubber scraps are collected and periodically picked up by a recycling company at no cost to the shoe manufacturer. Which of the following classifications of these items would be accurate?

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A

the defective boots are spoilage and the leather and the rubber are scrap

B

the defective boots, leather and rubber are scrap but the shoes are more valuable scrap as they can be sold

C

the defective boots are spoilage , the leather strips are scrap, and the rubber is rework

D

all three items are spoilage

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Question 6
Multiple Choice

Which of the following is an example of scrap?

Choose correct answer/s
A
short lengths from woodworking operations that must be discarded
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
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Question 7
True/False

Some amounts of spoilage, rework, or scrap are inherent in many production processes.

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True
False
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Question 8
True/False

An item classified as spoilage has no value.

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True
False
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Question 9
True/False

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

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True
False
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Question 10
True/False

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

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True
False
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Question 11
True/False

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.

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True
False
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Question 12
True/False

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

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True
False
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Question 13
True/False

There is no difference between scrap which can be sold for relatively small amount and a byproduct.

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True
False
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Question 14
Essay

Distinguish among spoilage, reworked units, and scrap. Give an example of each.

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Question 15
Essay

For each of the following items identify whether it is spoilage, reworked units, or scrap.
________ a.Defective shirts sold as seconds
________ b.End cuts from suit-making operations that are discarded
________ c.Edges from plastic moldings that is a low value byproduct
________ d.Carpets sold as seconds in a factory outlet at a deep discount
________ e.Precision tools that are not built successfully to the necessary tolerance,
but which can be successfully converted to a saleable product
________ f.Rock extracted as a result of mining processing
________ g.Complex defective products such as semiconductors

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Question 16
Multiple Choice

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

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A
incremental spoilage
B
normal spoilage
C
irregular spoilage
D
direct spoilage
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Question 17
Multiple Choice

Spoilage that is not inherent in a particular production process and would not arise under efficient operating conditions is referred to as ________ .

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A
incremental spoilage
B
usual spoilage
C
abnormal spoilage
D
indirect spoilage
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Question 18
Multiple Choice

Costs of normal spoilage are usually accounted for as ________ .

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A
a deduction from the cost of goods sold
B
a component of the costs of good units manufactured
C
a "loss from normal spoilage account" in income statement
D
a liability on a balance sheet
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Question 19
Multiple Choice

Costs of abnormal spoilage are usually accounted for as ________ .

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A
a deduction from the cost of goods sold
B
a component of the costs of good units manufactured
C
a separate line item in an income statement
D
an asset on a balance sheet
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Question 20
Multiple Choice

The loss from abnormal spoilage account would appear ________ .

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A
on a balance sheet
B
as a detailed item in the retained earnings schedule of a balance sheet
C
a separate line item on an income statement
D
a deduction from the cost of goods sold
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