Questions from Cost Accounting

Q: Veritek Wholesalers operates at capacity and sells furniture items to four department

Veritek Wholesalers operates at capacity and sells furniture items to four department-store chains (customers). Mr. Veritek commented, “We apply ABC to determine product-line profita...

Q: When is a company justified in inventorying scrap?

When is a company justified in inventorying scrap?

Q: “Normal spoilage is planned spoilage.” Discuss.

“Normal spoilage is planned spoilage.” Discuss.

Q: “Costs of abnormal spoilage are losses.” Explain.

“Costs of abnormal spoilage are losses.” Explain.

Q: “What has been regarded as normal spoilage in the past is

“What has been regarded as normal spoilage in the past is not necessarily acceptable as normal spoilage in the present or future.” Explain.

Q: “Units of abnormal spoilage are inferred rather than identified.” Explain

“Units of abnormal spoilage are inferred rather than identified.” Explain.

Q: “In accounting for spoiled units, we are dealing with cost

“In accounting for spoiled units, we are dealing with cost assignment rather than cost incurrence.” Explain.

Q: “The inspection point is the key to the allocation of spoilage

“The inspection point is the key to the allocation of spoilage costs.” Do you agree? Explain.

Q: Describe two benefits of improving quality.

Describe two benefits of improving quality.

Q: How does conformance quality differ from design quality? Explain.

How does conformance quality differ from design quality? Explain.