Microsoft
MB-335 · Question #103
MB-335 Question #103: Real Exam Question with Answer & Explanation
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Question
A company produces rubber hose. Discrete orders accounts for raw material scrap. The scrap is reported 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 lost during startup. What should you do?
Options
- AEnter the consumption amount on the line to match the actual amount used.
- BDo a case study for the scrap items and enter the average amount of scrap as separate line items
- CEnter the amount of scrap that is consumed as constant scrap in the Bill of materials.
- DEnter the amount of scrap that is consumed as variable scrap in the Bill of materials.
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