If Abnormal Spoilage Occurs in a Job-Order Costing System,has a Material

question 53

Multiple Choice

If abnormal spoilage occurs in a job-order costing system,has a material dollar value,and is related to a specific job,the recovery value of the spoiled goods should be
$\text {\underline{ debited to} }$                   $\text {\underline{ credited to} }$

• A)a scrap inventory account the specific job in process
• B)the specific job in process overhead
• C)a loss account the specific job in process
• D)factory overhead sales

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Definitions:

Entity Method

A consolidation approach where investments are recorded at the purchase cost, adjusted for the parent company's share in the subsidiary's post-acquisition profits or losses.

Gross Margin

A company's revenue minus its cost of goods sold, divided by revenue, expressed as a percentage, indicating the percentage of revenue that exceeds the cost of goods sold.

Inventory

Inventory comprises the goods and materials a business holds for the purpose of resale or production.

Consolidated Net Income

The total earnings of a corporation, after taxes and expenses, including its subsidiaries, presented in a single financial statement.