When Abnormal Rework Is Distinguished from Normal Rework, and Charged

question 82

Multiple Choice

When abnormal rework is distinguished from normal rework, and charged to a separate loss account, which of the following is a likely result?

• A) Prices will have to increase on the company's products accordingly.
• B) If responsibility for normal spoilage expense is penalized less heavily than the unfavourable efficiency variances arising from rework, then managers will tend to rework too many spoiled units.
• C) If responsibility for abnormal spoilage expense is penalized less heavily than the unfavourable efficiency variances arising from rework, then managers will tend to rework too many spoiled units.
• D) If responsibility for normal spoilage expense is penalized more heavily than the unfavourable efficiency variances arising from rework, then managers will tend to rework too many spoiled units.
• E) If responsibility for abnormal spoilage expense is penalized more heavily than the unfavourable efficiency variances arising from rework, then managers will tend to rework too many spoiled units.

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Definitions:

Hydraulic Circuit

A system using pressurized fluid to power devices, often consisting of pumps, pipes, valves, and actuators.

Laminar Flow

Streamlined flow through a hydraulic circuit. A hydraulic circuit should be designed to minimize friction caused by sharp angles and internal obstructions.

Hydrodynamics

The branch of physics that deals with the motion of fluids, particularly water, and the forces acting on them.

Lower-priced Handbags

relates to handbags sold at a price point that is typically below the average market price, aiming at affordability without necessarily compromising on quality.