Spoilage and Rework in Job Costing

These flashcards cover key concepts related to spoilage and rework in job costing as discussed in the lecture notes.

Spoilage

The unacceptable units that are discarded or sold for disposal value.

Normal Spoilage

Occurs under normal operating conditions; part of total job cost.

Abnormal Spoilage

Excess spoilage over the expected amount, treated as a loss.

Work in Process Inventory

An inventory account that represents the costs of incomplete jobs.

Rework

Units that are produced but require additional work to be sold as good units.

Loss from Abnormal Spoilage

An account where costs associated with abnormal spoilage are charged.

Factory Overhead

Costs associated with production that are not direct materials or direct labor.

Scrap

Material left over from the production process, often with little or no value.

Sales Method of Scrap

Accounting method used when scrap is sold quickly, ignoring transfer to storeroom.

Production Method of Scrap

Method used when scrap is held for longer periods, allowing for resale on value.