Microsoft
MB-320 · Question #42
A company produces rubber hose using Discreet orders accounts for raw material scrap after report as finished through inventory movement journals. The company has noticed that most of the scrap that…
The correct answer is B. Enter the amount of scrap that is consumed as constant scrap in the Bill of materials. See the full explanation below for the reasoning.
Question
A company produces rubber hose using Discreet orders accounts for raw material scrap after report as finished through inventory movement journals. The company has noticed that most of the scrap that is recorded is due to start up that feeds the hose to the finishing process. In addition, the amount of scrap that is recorded is consistent regardless of the amount of hose being produced. You need to account for material cost during startup. What should you do?
Options
- ADo a case study for the scrap items and enter the average amount of scrap as a separate line
- BEnter the amount of scrap that is consumed as constant scrap in the Bill of materials.
- CEnter the amount of scrap that is consumed as variable scrap in the Bill of materials.
- DEnter the consumption amount on the line to match the actual amount used.
How the community answered
(17 responses)- A6% (1)
- B76% (13)
- C6% (1)
- D12% (2)
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