In a Process Costing System, Which Assumes That Normal Spoilage

question 9

Multiple Choice

In a process costing system, which assumes that normal spoilage occurs at the end of a process, the cost attributable to normal spoilage should be assigned to:

• A)Beginning work-in-process inventory.
• B)Ending work-in-process inventory.
• C)Cost of goods manufactured and ending work-in-process inventory in the ratio of units worked on during the period to units remaining in work-in-process inventory.
• D)Cost of goods manufactured (transferred out).
• E)A separate loss account in order to highlight production inefficiencies.

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Definitions:

Top-management Commitment

The dedication and involvement of an organization's highest-ranking officers in supporting and driving a project or strategy.

Management By Objectives (MBO)

A management strategy in which employees and managers collaborate to set, monitor, and achieve specific objectives within an organization.

Management By Objectives (MBO)

A strategic management model where goals are defined for each employee and performance is assessed on the basis of achieving these objectives.

Theory X

A management theory assuming that employees are naturally unmotivated and need strict supervision and control to be productive.