Question 1

The Hawg Manufacturing Shop produces motorcycle parts. Typically, 20 pieces out of a job lot of 2,000 parts are normally spoiled. Costs are assigned at the inspection point, $100.00 per unit. Spoiled pieces may be disposed of for proceeds of $20.00 per unit. The spoiled goods must be inventoried appropriately when the normal spoilage is detected. The current job requires the production of 5,000 good parts.
Which of the following journal entries properly reflects the recording of spoiled goods?

Accepted Answer

A)  
B)  
C)  
D)  
E)  F) A) and B)
G) A) and C)

Question 2

Use the information below to answer the following question(s) .
Craft 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 non-detectable materials defects. Inspection occurs at the end of the process. Spoiled units generally constitute 5 percent of the good units. Data for December are as follows:
 
-What are the amounts of direct materials and conversion costs assigned to ending work-in-process using the weighted-average process costing method?

Accepted Answer

A)   $18,720; $24,000
B)   $22,900; $19,820
C)   $24,000; $18,720
D)   $28,560; $14,160
E)   $33,650; $14,140F) A) and E)
G) B) and D)

Exam 18: Spoilage, Rework, and Scrap

Correct Answer
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Correct Answer
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Exam 18: Spoilage, Rework, and Scrap

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Correct Answer
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