Question 1

All of the following accounts may, under certain circumstances, be credited for the revenue from scrap materials sales except:

MOH

WIP

Scrap Revenue

Raw Materials

Question 2

Which of the following statements is NOT true?

Spoilage is a normal part of the manufacturing process

Spoilage might occur in a single job.

Spoilage might effect multiple jobs.

If spoiled goods represented more than 1% of a job, they would automatically be considered abnormal.

IncorrectQuestion 3

Costs of abnormal spoilage are considered

Period costs

Product costs

Inventoriable costs

Conversion Costs

None of the above

Question 4

If a company incurs costs to repair defective inventory items, those costs would most likely be _________

expensed.

charged either to MOH or WIP.

charged to Finished goods.

Charged to Raw material.

Question 5

Ulla Industries spent $100,000 in Job 25-92 making 10,000 units of Product 122-45. 30 of the 10,000 units completed were defective and could not be repaired or sold as seconds. This was considered normal spoilage in the company and was not directly related to the job specifications. Which of the following statements is true?

No journal entry should be made

Ulla should debit WIP for $300 and credit MOH for $300.

Ulla should debit Spoiled Goods Inventory for $300 and credit WIP for $300

Ulla should debit MOH for $300 and credit WIP for $300.