4) The accounting for scrap under process costing similar to
4) The accounting for scrap under process costing is similar to the accounting under:
A) job costing when scrap is different for each job
B) job costing when scrap is common to all jobs
C) process costing when scrap is different for each job
D) process costing when scrap is a common to all jobs
5) Which of the following is NOT a major consideration when accounting for scrap?
A) keeping detailed records of physical quantities of scrap at all stages of the production process
B) inventory costing including when and how scrap affects operating income
C) planning and control including physical tracking
D) decisions as to whether to group scrap with reworked units
6) Scrap is usually divided between normal and abnormal scrap.
7) If scrap is returned to the company's storeroom and inventoried, it should NOT have any value in the accounting records.
8) When the dollar amount of scrap is immaterial, the simplest accounting is to record the physical quantity of scrap returned to the storeroom and to regard scrap sales as a separate line item in the income statement.
9) Costs are assigned to scrap only if it is normal scrap.
10) Accounting for scrap is very similar to accounting for byproducts.
11) Recognizing the value of scrap in the accounting records is always done at the time the scrap is produced.
12) Busy Hands Craft Company is a small manufacturing company that specializes in arts and crafts items. It recently bought an old textile mill that it has refurbished to manufacture and dye special cloth to be sold in its craft shops. However, it discovered something new for its accounting system. The company never before had finished goods that did not meet standard, leftover materials from processing runs, or unacceptable outputs.
As the business consultant for the company, explain how it can handle the items mentioned. Include any poten