1. Managers often cite reductions in the costs of spoilage as a(n)
a. major justification for implementing a just-in-time production system.
b. measurement of improved output quality.
c. immaterial item that is not to be tracked.
d. indication of improvement in the accounting system.
2. Unacceptable units of production that are discarded or are sold for reduced prices are referred to as
a. reworked units.
b. spoilage.
c. scrap.
d. defective units.
3. Material left over when making a product is referred to as
a. reworked units.
b. spoilage.
c. scrap.
d. defective units.
4. 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
5. When the amount of scrap is immaterial, the easiest accounting entry when recording scrap sold for cash is
a. Sales of Scrap
Cash
b. Cash
Manufacturing Overhead Control
c. Cash
Sales of Scrap
d. Accounts Receivable
Sales of scrap