ADMN 3121H Lecture Notes - Lecture 8: Outlet Store, Income Statement, Accounts Receivable
30 Mar 2020
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Lecture 8 chapter 18 spoilage, rework and scrap. Distinguish among spoilage, rework, and scrap, and apply the appropriate methods to account for normal and abnormal spoilage. Apply process-costing methods to account for spoilage using weighted-average and first-in, first-out (fifo) methods. Apply the standard-costing method to account for spoilage. Apply job cost allocation procedures to account for spoilage in job costing. Apply cost allocation procedures to account for reworked units and scrap. Rework: unacceptable units of production that do not meet the specifications required by customers that are subsequently repaired and sold as finished goods of the same or lower quality: examples: meat trimmings, damaged motherboards. Scrap: residual material that results from manufacturing a product. May have disposal/ removal costs if not sellable or reusable. Inputs paid for that cannot be converted into a saleable product represent costs that will not be recovered. Minimizing costs may require: redesign of the production process, new/updated machinery.
