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    Spoilage

    Uploaded by

    ela kikay
    The document contains 20 multiple choice questions regarding accounting for normal spoilage, abnormal spoilage, rework, and calculation of unit costs and cost of goods sold for job order costing. Specifically: - It defines normal/ordinary spoilage as inherent to production and abnormal spoilage as avoidable. - Normal spoilage costs are included in cost of goods manufactured while abnormal spoilage costs are a separate line item. - Rework costs due to internal failures are included in production costs while rework due to customer requests is a deduction from cost of goods sold. - Several questions involve calculating unit costs, total costs, and cost of goods sold for jobs with spoilage or rework that is either normal or abnormal

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    © All Rights Reserved
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    Spoilage

    Uploaded by

    ela kikay
    136 views3 pages
    The document contains 20 multiple choice questions regarding accounting for normal spoilage, abnormal spoilage, rework, and calculation of unit costs and cost of goods sold for job order costing. Specifically: - It defines normal/ordinary spoilage as inherent to production and abnormal spoilage as avoidable. - Normal spoilage costs are included in cost of goods manufactured while abnormal spoilage costs are a separate line item. - Rework costs due to internal failures are included in production costs while rework due to customer requests is a deduction from cost of goods sold. - Several questions involve calculating unit costs, total costs, and cost of goods sold for jobs with spoilage or rework that is either normal or abnormal

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    The document contains 20 multiple choice questions regarding accounting for normal spoilage, abnormal spoilage, rework, and calculation of unit costs and cost of goods sold for job order costing. Specifically: - It defines normal/ordinary spoilage as inherent to production and abnormal spoilage as avoidable. - Normal spoilage costs are included in cost of goods manufactured while abnormal spoilage costs are a separate line item. - Rework costs due to internal failures are included in production costs while rework due to customer requests is a deduction from cost of goods sold. - Several questions involve calculating unit costs, total costs, and cost of goods sold for jobs with spoilage or rework that is either normal or abnormal

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    136 views3 pages

    Spoilage

    Uploaded by

    ela kikay
    The document contains 20 multiple choice questions regarding accounting for normal spoilage, abnormal spoilage, rework, and calculation of unit costs and cost of goods sold for job order costing. Specifically: - It defines normal/ordinary spoilage as inherent to production and abnormal spoilage as avoidable. - Normal spoilage costs are included in cost of goods manufactured while abnormal spoilage costs are a separate line item. - Rework costs due to internal failures are included in production costs while rework due to customer requests is a deduction from cost of goods sold. - Several questions involve calculating unit costs, total costs, and cost of goods sold for jobs with spoilage or rework that is either normal or abnormal

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    You are on page 1of 3

    1.

    Unacceptable units of production that are subsequently repaired and sold as acceptable finished goods are:
    A. reworked units
    B. spoilage
    C. scrap
    D. defective units

    2. Spoilage that is an inherent result of the particular production process and arises under efficient operating
    conditions is referred to as:
    A. ordinary spoilage
    B. normal spoilage
    C. abnormal spoilage
    D. None of these answers is correct.

    3. Spoilage that should NOT arise under efficient operating conditions is referred to as:
    A. ordinary spoilage
    B. normal spoilage
    C. abnormal spoilage
    D. None of these answers is correct.

    4. Costs of normal spoilage are usually accounted for as:


    A. part of the cost of goods sold
    B. part of the cost of goods manufactured
    C. a separate line item in the income statement
    D. an asset in the balance sheet

    5. Costs of abnormal spoilage are usually accounted for as:


    A. part of the cost of goods sold
    B. part of the cost of goods manufactured
    C. a separate line item in the income statement
    D. an asset in the balance sheet

    6. When spoilage occurs because of some action taken by the customer, the unrecoverable cost of the spoilage
    should be charged to:
    A. Work in Process
    B. Spoiled Goods Inventory
    C. Factory Overhead Control
    D. Applied Factory Overhead

    7. When rework occurs because of some internal failure, the cost of rework should be charged to:
    A. Work in Process
    B. Spoiled Goods Inventory
    C. Factory Overhead Control
    D. Applied Factory Overhead

    8. During March, Silver Company incurred the following costs on Job 009 for the manufacture of 200 motors:
    Original cost accumulation:
    Direct materials P660
    Direct labor 800
    Factory overhead (150% of direct labor) 1,200
    P2,660

    Direct costs of reworking 10 units:


    Direct materials P100
    Direct labor 160
    P260

    The rework costs were attributable to the exacting specifications of the customer. What is the cost per finished
    unit of Job 009?
    A. P15.80
    B. P14.60
    C. P14.00

    1 of 2
    D. P13.30

    The following information will be used for Questions 9 and 10


    Ukay Company's Job 165 for the manufacture of 2,200 coats was completed during August at the unit costs
    presented below. 200 coats were found to be spoiled during final inspection that were sold to a jobber for P6,400.

    Direct materials P30


    Direct labor 16
    Factory overhead 16
    P62
    9. If the spoilage is due to an internal failure during production, what would be the unit cost of good coats produced
    on Job 165?
    A. P62.00
    B. P65.00
    C. P60.00
    D. P63.00

    10. If the spoilage is due to an extraordinary request of a customer on Job 165, what would be the unit cost of good
    coats produced on Job 165?
    A. P62.00
    B. P65.00
    C. P60.00
    D. P63.00

    The following information will be used for Questions 11-20


    Black Sand Co. uses a job order costing system. At the beginning of October, the company only had Job 151 in
    process with the following costs:
    Direct Material P20,000
    Direct Labor 10,000
    Overhead 15,000

    Job 151 has 100 units of customized products. The company pays its workers P300 per hour and applies
    overhead based on direct labor cost.

    During October, the company worked on Jobs 151, 152 and 153. The materials used totaled to P200,000 in which
    20%, 30% and 40% were requisitioned for Job 151, 152 and 153, respectively. The balance of the requisitions
    was considered indirect. Direct labor hours per job are 80, 110 and 130 respectively. Indirect labor is P67,000.
    Other actual overhead costs totaled P53,000. Jobs 151 and 153 were finished but only Job 151 was sold in
    October. 10 spoiled units were discovered in Job 151 during the production.

    11. If the spoiled units were attributable to the inherently meticulous nature of the job order, how much is the total
    production cost of Job 151 after removing the spoiled units? The spoiled units were sold at P7,500.
    A. P145,000
    B. P137,500
    C. P138,000
    D. P130,500

    12. If the spoiled units were attributable to the inherently meticulous nature of the job order, how much is the cost per
    unit of Job 151 after removing the spoiled units? The spoiled units were sold at P7,500.
    A. P1,450.00
    B. P1,611.11
    C. P1,527.78
    D. P1,533.33

    2 of 2
    13. If the spoiled units were attributable to the inherently meticulous nature of the job order, how much is the adjusted
    cost of goods sold during the period? The spoiled units were sold at P7,500.
    A. P133,500
    B. P141,500
    C. P134,000
    D. P142,000

    14. If the spoiled units were attributable to an internal failure during production, how much is the total production cost
    of Job 151 after removing the spoiled units? The spoiled units were sold at P7,500.
    A. P145,000
    B. P137,500
    C. P138,000
    D. P130,500

    15. If the spoiled units were attributable to an internal failure during production, how much is the cost per unit of Job
    151 after removing the spoiled units? The spoiled units were sold at P7,500.
    A. P1,450.00
    B. P1,611.11
    C. P1,527.78
    D. P1,533.33

    16. If the spoiled units were attributable to an internal failure during production, how much is the under(over)applied
    overhead variance after effecting the cost of spoiled units? The spoiled units were sold at P7,500.
    A. P3,000
    B. P11,000
    C. (P4,000)
    D. P7,000

    17. If the spoiled units were attributable to an internal failure during production and were reworked to become salable
    goods, how much is the cost of rework? The company spent P3,000 of direct materials and P900 of direct labor
    for the rework.
    A. P3,900
    B. P4,800
    C. P5,250
    D. P5,700

    18. If the spoiled units were attributable to the inherently meticulous nature of the job order and were reworked to
    become salable goods, how much is the total production cost of Job 151 after the rework? The company spent
    P3,000 of direct materials and P900 of direct labor for the rework.
    A. P145,000
    B. P148,900
    C. P149,800
    D. P150,250

    19. If the spoiled units were attributable to the inherently meticulous nature of the job order and were reworked to
    become salable goods, how much is the cost per unit of Job 151 after the rework? The company spent P3,000 of
    direct materials and P900 of direct labor for the rework.
    A. P1,450.00
    B. P1,502.50
    C. P1,611.11
    D. P1,489.00

    20. If the spoiled units were attributable to the inherently meticulous nature of the job order and were reworked to
    become salable goods, how much is the adjusted cost of goods sold during the period? The company spent
    P3,000 of direct materials and P900 of direct labor for the rework.
    A. P144,900
    B. P152,900
    C. P141,000
    D. P146,250

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