CHAPTER 18 QUIZ
1. [CPA Adapted] In manufacturing its products for the month of September 2008, El
Dorado Corporation incurred normal spoilage of $7,000 and abnormal spoilage of $3,000.
How much spoilage cost should El Dorado charge as inventoriable for the month of
September 2005?
a. $0
b. $3,000
c. $7,000
d. $10,000
2. [CPA Adapted] Spoilage from a manufacturing process was discovered during an
inspection of work-in-process. In a process-costing system, the cost of the spoilage would
be added to the cost of the good units produced if the spoilage is
Normal Abnormal
a. Yes Yes
b. Yes No
c. No No
d. No Yes
The following data apply to questions 3 through 5.
Watkins Company had the following production for the month of June:
Units
Work-in-process, June 1 6,000
Started during June 24,000
Completed and transferred to finished goods 18,000
Abnormal spoilage incurred 3,000
Work-in-process, June 30 9,000
Materials are added at the beginning of the process. As to conversion cost, work-in-process
was 20 percent complete at the beginning and 70 percent complete at the end of the month.
Spoilage is detected at the end of the process.
3. [CPA Adapted] Using the weighted-average method, the equivalent units for June, with
respect to conversion cost, were
a. 30,000.
b. 24,300.
c. 23,700.
d. 27,300.
4. Assume the manufacturing cost of the spoiled goods is $6,000. The journal entry to
record the spoilage is
a. Manufacturing Overhead Control 6,000
Work-in-Process 6,000
b. Materials Control 6,000
Work-in-Process 6,000
c. Loss from Abnormal Spoilage 6,000
Work-in-Process 6,000
d. Finished Goods 6,000
Work-in-Process 6,000
5. Using the first-in, first-out (FIFO) method, the equivalent units for June, with respect to
conversion cost, were
a. 26,100.
b. 23,100.
c. 22,500.
d. 19,500.
6. Under process costing and job costing, the accounting treatment for the normal spoilage
(assume related to normal factory operations) is
Process costing Job costing
a. Loss account is charged. Loss account is charged.
b. Upon transfer, spoilage costs Loss account is charged.
are transferred along with other
costs.
c. Upon transfer, spoilage costs are Manufacturing overhead
transferred along with other costs. control is charged.
d. Manufacturing overhead control No entry.
is charged.
7. [CPA Adapted] During August 2008, Stirtz Company incurred the following costs on
Job 924 for the manufacture of 600 scoreboard clocks:
Original cost accumulation:
Direct materials $2,250
Direct manufacturing labor 1,800
Manufacturing overhead (150% of direct manufacturing labor) 2,700
$6,750
Direct costs of reworked 15 units:
Direct materials $150
Direct manufacturing labor 240
$390
The rework costs were attributable to exacting specifications of Job 924, and the full
rework costs were charged to the specific job. The cost per finished unit of Job 924 was
a. $12.50.
b. $11.25.
c. $11.61.
d. $11.90.
The following data apply to questions 8 and 9.
MedTech, Inc. manufactures surgical instruments to the exacting specifications of various
customers. During April 2005, Job 911 for the production of 4,500 instruments was
completed at the following costs per unit:
Direct materials $ 60
Direct manufacturing labor 20
Allocated manufacturing overhead 80
$160
Final inspection of Job 911 disclosed 100 defective units and 50 spoiled units. The
defective instruments were reworked at a total cost of $12,000, and the spoiled instruments
were sold to a jobber for $3,000.
8. [CPA Adapted] What would be the unit cost of the good units produced on Job 911?
a. $160
b. $162
c. $164
d. $168
9. If the costs associated with spoilage and reworked units are considered as normal to
manufacturing operations, the unit cost of the good units produced on Job 911 is
a. $165.
b. $164.
c. $162.
d. $160.
10. [CPA Adapted] The sale of scrap from a manufacturing process usually would be
recorded as a(n)
a. increase in manufacturing overhead control.
b. decrease in manufacturing overhead control.
c. increase in finished goods control.
d. decrease in finished goods control.
CHAPTER 18 QUIZ SOLUTIONS
