Spoilage, Rework, and Scrap
SPOILAGE, REWORK, AND SCRAP
18-1 Managers have found that improved quality and intolerance for high spoilage have lowered overall costs and increased sales.
18-2 Spoilage—units of production that do not meet the standards required by customers for good units and that are discarded or sold at reduced prices. Rework—units of production that do not meet the specifications required by customers but which are subsequently repaired and sold as good finished units. Scrap—residual material that results from manufacturing a product. It has low total sales value compared to the total sales value of the product.
18-3 Yes. Normal spoilage is spoilage inherent in a particular production process that arises even under efficient operating …show more content…
| |Equivalent Units |
| |Physical |Direct |Conversion |
|Flow of Production |Units |Materials |Costs |
|Work in process, beginning (given) |1,000 | | |
|Started during current period |10,150a | | |
|To account for |11,150 | | |
|Good units completed and transferred out | | | |
|during current period: |9,000 |9,000 |9,000 |
|Normal spoilage* |100 | | |
|100 ( 100%; 100 ( 100% | |100 |100 |
|Abnormal spoilage† |50