Question

Spoilage, Rework, and Scrap: Indicate the expected percentage level of spoilage and rework as a percentage of sales. Justify your answer.

The answer should be one page

Answer 1

Spoiled, not recoverable:

Loss from abnormal spoilage [(30,000/1,000) X $35.00] =$1,050

Work-in-process control1,050

Rework, recoverable:

Materials control [(100,000/1,000) X $20.00] = $ 2,000

Manufacturing overhead allocated [(100,000/1,000) X $1.50]150

Direct wages and materials control 1,850

Spoilage is determined through quality assessments. In certain processes spoilage can be broken down into units. Those units can then be reworked and then sold as higher-quality products. This possibility depends strongly upon the specific product itself. The soybeans spoilage is a process that is inevitable and irreversible, but this process can be delayed.The level of breakage in soybeans varies with the force that each individual seed receives during conveying . The storability of soybeans depends on the degree of damage to the seed coat and by other factors. If the amount of spoilage is very high, the broken or split grains should be separated. This material can then be used first as soybean meal, as opposed to long-term storage with the original stock.

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