成本与管理会计-亨格瑞-第13版-英文版-CA18.ppt

Spoilage,Rework,and ScrapCHAPTER 182024/4/15 周一1TerminologySpoilage,rework,and scrap have distinctive definitions in cost accounting that may not be the definition commonly used.P510（639）It is important that these terms be used properly,as each receives a different accounting treatment.2024/4/15 周一2Terminology,conts.Spoilage is units of production that do not meet the specifications required by customers for good units and are discarded or sold at reduced prices.Rework is units of production that do not meet the specifications required by customers but are repaired and sold as good finished units.Spoiled units can be reworked,but only at a considerable costScrap is residual material that results from manufacturing a product.It has low or zero sales value.2024/4/15 周一3SpoilageDifferent types of Spoilage P511（639）Spoilage is divided into two types:normal spoilage and abnormal spoilage.Normal spoilage is spoilage inherent in the production process.It is viewed arising even in an efficient manufacturing process.Typically,normal spoilage is included as a part of the cost of good units manufactured.Units considered normal spoilage in a process-costing system are counted in computing completed units.2024/4/15 周一4Spoilage,conts.Abnormal spoilage is spoilage that is not considered a part of the production process and does not arise under efficient operating conditions.Abnormal spoilage is regarded as avoidable and controllable.To highlight the abnormal spoilage,companies calculate the units of abnormal spoilage and record the cost in a“Loss from Abnormal Spoilage”account,which appears as a separate line item in the income statement.Some companies regard all spoilage as abnormal in order to make all spoilage visible.2024/4/15 周一5Spoilage,conts.Illustration:in January 2008,mendonza incurs costs of$615000 to produce 20500 units.of these 20500 units,20000 units are good units and 500 units are spoiled units.of 500 spoiled units,400 units are spoiled because the injection molding machine are unable to manufacture good casings 100%of the time.the remaining 100 units are spoiled because of machine breakdown and operation errors.2024/4/15 周一6Spoilage,conts.2024/4/15 周一7Accounting for SpoilageAccounting for spoilage aims to determine the magnitude of spoilage costs and to distinguish between costs of normal and abnormal spoilageTo manage,control and reduce spoilage costs,they should be highlighted,not simply folded into production costs2024/4/15 周一8Spoilage,conts.The five-step procedure for process costing(discussed in Chapter 17)needs only slight modification to accommodate accounting for spoilage.P514(642)Step 1:Summarize the Flow of Physical Units of Output.Units of both normal and abnormal spoilage are identified.Step 2:Compute Output in Terms of Equivalent Units.Include a calculation for equivalent units for spoilage.2024/4/15 周一9Spoilage,conts.The five-step procedure for process costing needs only slight modification to accommodate accounting for spoilage.Step 3:Summarize Total Costs to Account For.This is all costs debited to the Work-in-Process account.Step 4:Compute Cost per Equivalent Unit.Step 5:Assign Total Costs to Units Completed,to Spoiled Units,and to Units in Ending Work-in-Process.2024/4/15 周一10Spoilage,conts.Accounting for spoilage in process costing using the FIFO or WA method is similar to the approach discussed in the previous chapter.P515(643)Normal and abnormal units are treated as additional unit groups for which cost-per-equivalent-unit needs to be calculated and costs assigned.Spoilage costs are always considered to have occurred in the current period and are not included in the cost of ending work-in-process inventory.2024/4/15 周一11Spoilage,conts.Example P513(641)2024/4/15 周一12Spoilage,conts.Example P513(641)2024/4/15 周一13Spoilage,conts.P514(642)2024/4/15 周一14Spoilage,conts.P516(644),WA Mehhod2024/4/15 周一15Spoilage,conts.P516(644),WA Method2024/4/15 周一16Spoilage,conts.P517(645),FIFO Method2024/4/15 周一17Spoilage,conts.P517(645),FIFO Method2024/4/15 周一18Spoilage,conts.Accounting for spoilage in process-costing systems using the standard-costing method is very similar to the standard-costing method discussed in the previous chapter.P518(646)The only difference is that the normal and abnormal units are treated as additional unit groups for which cost-per-equivalent-unit needs to be calculated and costs assigned.2024/4/15 周一19Spoilage,conts.Accounting for spoilage in process-costing systems using the standard-costing method is very similar to the standard-costing method discussed in the previous chapter.Costs are assigned to normal and abnormal spoilage units using standard costs.As with the weighted-average and FIFO methods,the costs of normal spoilage are included in the total costs to account for and the costs assigned to units completed and transferred out.2024/4/15 周一20Spoilage,conts.P519(647),SC Method2024/4/15 周一21Spoilage,conts.P519(647),SC Method2024/4/15 周一22Spoilage,conts.The inspection point is the stage of completion at which products are examined to determine if they are acceptable units.P520(648)Spoilage is typically assumed to occur at the stage of completion where inspection takes place.2024/4/15 周一23Spoilage,conts.The concepts of normal and abnormal spoilage also apply to job-costing systems.Abnormal spoilage is a period cost and treated as an expense of the period in which it occurs.Normal spoilage is inventoriable and included as a cost of the product.Companies frequently distinguish between normal spoilage attributable to a specific job from normal spoilage common to all jobs.2024/4/15 周一24Spoilage,conts.The concepts of normal and abnormal spoilage also apply to job-costing systems.P520(648)When normal spoilage is considered attributable to a specific job,that job bears the cost of the spoilage.When normal spoilage is considered attributable to all jobs,it is a characteristic of the production process and is allocated as a manufacturing overhead cost.2024/4/15 周一25Spoilage,conts.2024/4/15 周一26ReworkUnits that are reworked are units that have been inspected and found to be unacceptable.However,these units are such that they can be repaired and sold as acceptable finished units.P522(650)Normal rework attributable to a specific job is charged to that job.2024/4/15 周一27Rework,conts.If it is normal rework common to all jobs,the costs are charged to manufacturing overhead and spread over all jobs.If the rework is considered abnormal,the costs of the rework are charged to a“Loss from Abnormal Rework”account.2024/4/15 周一28Rework,conts.2024/4/15 周一29ScrapScrap is the leftover material resulting from manufacturing a product.It has a low(or zero)sales value.P523(651)Two aspects of accounting for scrap are:Planning and control,including physical tracking.Inventory costing.This depends on how revenues are recognized from the sale of scrap.2024/4/15 周一30Scrap,conts.urecognizing scrap at the time of sale P523(651)No inventory records are maintained for scrap.When sold,cash or accounts receivable is debited and scrap revenues is credited.2024/4/15 周一31Scrap,conts.2024/4/15 周一32Scrap,conts.recognizing scarp at the time of production P524(652)When scrap has more than an insignificant value,it is assigned an inventory valuation equal to its sales value and a materials account is debited with a credit to work-in-process or manufacturing overhead.When sold,cash or accounts receivable is debited with the inventory account being credited.2024/4/15 周一33Scrap,conts.2024/4/15 周一34THE END!2024/4/15 周一35