Question :
Objective 18.4
1) The inspection point the:
A) stage of the production : 1217034
Objective 18.4
1) The inspection point is the:
A) stage of the production cycle where products are checked to determine whether they are acceptable or unacceptable units
B) point at which costs are allocated between normal and abnormal spoilage
C) point at which the calculation of equivalent units is made
D) None of these answers is correct.
2) When spoiled goods have a disposal value, the net cost of the spoilage is computed by:
A) deducting disposal value from the costs of the spoiled goods accumulated to the inspection point
B) adding the costs to complete a salable product to the costs accumulated to the inspection point
C) calculating the costs incurred to the inspection point
D) None of these answers is correct.
3) The costs of normal spoilage are allocated to the units in ending work-in-process inventory, in addition to completed units if the units:
A) in ending inventory have not passed the inspection point
B) in ending work-in-process inventory have passed the inspection point
C) in ending work in process inventory are more than 50% complete
D) in ending work-in-process inventory are less than 50% complete
4) Normal spoilage is computed on the basis of the number of:
A) good units that pass inspection during the current period
B) units that pass the inspection point during the current period
C) units that are 100% complete as to materials
D) None of these answers is correct.
5) Which of the following INCORRECTLY reflects what units passed inspection this period? Assume beginning work in process was completed and ending work in process was started during the period.
Inspection Point at Completion Level
10%50%100%
A) Beginning work in process (30% complete) NoYesYes
B) Started and completedYesYesYes
C) Ending work in process (40% complete) Yes No No
D) Beginning work in process (5% complete) YesNoNo
6) In general, it is presumed that normal spoilage occurs halfway between the beginning of the production process and the inspection point in the production cycle. This is because there is no easy way to determine where the spoilage has happened until the inspection has occurred.
7) All accounting systems must assume that the inspection point occurs when a process is 100% complete.
Objective 18.5
1) The Harleysville Manufacturing Shop produces motorcycle parts. Typically, 10 pieces out of a job lot of 1,000 parts are spoiled. Costs are assigned at the inspection point, $50.00 per unit. Spoiled pieces may be disposed at $10.00 per unit. The spoiled goods must be inventoried appropriately when the normal spoilage is detected. The current job requires the production of 2,500 good parts.
Which of the following journal entries properly reflects the recording of spoiled goods?
A) Materials Control200
Manufacturing Overhead Control800
Work-in-Process Control1,000
B) Materials Control250
Manufacturing Overhead Control1,000
Work-in-Process Control1,250
C) Work-in-Process Control1,250
Materials Control250
Manufacturing Overhead Control1,000
D) Manufacturing Overhead Control1,000
Materials Control200
Work-in-Process Control800
2) The Harleysville Manufacturing Shop produces motorcycle parts. Typically, 10 pieces out of a job lot of 1,000 parts are spoiled. Costs are assigned at the inspection point, $50.00 per unit. Spoiled pieces may be disposed at $10.00 per unit. The spoiled goods must be inventoried appropriately when the normal spoilage is detected. Job 101 requires the production of 2,500 good parts.
Which of the following journal entries would be correct if the spoilage occurred due to specifications required for Job 101?
A) Work-in-Process Control100
Materials Control100
B) Materials Control100
Work-in-Process Control100
C) Materials Control250
Work-in-Process Control250
D) Work-in-Process Control250
Materials Control250
3) A difference between job costing and process costing is that:
A) job-costing systems usually do not distinguish between normal spoilage attributable to all jobs and normal spoilage attributable to a specific job
B) job-costing systems usually distinguish between normal spoilage attributable to a specific job and spoilage common to all jobs
C) process costing normally does not distinguish between normal spoilage attributable to a specific job and spoilage common to all jobs
D) Both B and C are correct.
