18 3 apply the standard costing method to account for spoilage and allocate costs of 4302719


18.3   Apply the standard-costing method to account for spoilage, and allocate costs of normal spoilage.


1) Under standard costing, there is no need to calculate a cost per equivalent unit.


2) Process costing is simplified when using standard costs.


3) The calculation of equivalent units under standard costing is the same as under FIFO.


4) Which of the following can be used in accounting for spoilage?

A) standard costs


C) Weighted average

D) FIFO and weighted average but not standard costs

E) FIFO and weighted average and standard costs

5) The standard-costing method

A) adds a layer of complexity to the calculation of equivalent-unit costs in a process-costing environment.

B) makes calculating equivalent-unit costs unnecessary.

C) requires an analysis of the spoilage costs in beginning inventory.

D) requires an analysis of the spoilage costs in ending inventory.

E) requires a calculation of the cost allocation rate.


6) Springfield Sign Shop manufactures only specific orders. It uses a standard cost system. During one large order for the transit authority, an unusual number of signs were spoiled. The normal spoilage rate is 10% of units started. The point of first inspection is half way through the process, the second is three-fourths through the process, and the final inspection is at the end of the process. Other information about the job is as follows:


Signs started3,000

Signs spoiled450


Direct materials put into process at beginning $60,000

Conversion costs for job$120,000

Standard direct material costs per sign$27

Standard conversion cost per sign$54

Average point of spoilage is the 3/4 completion point

Average current disposal cost per spoiled sign$15



Make necessary journal entries to record all spoilage.

7) Hogan Ltd. uses a standard cost system in its manufacturing process. During a recent job, it noticed that its spoilage rate was high. Normal spoilage rate averages 8% of units started. Direct materials are added at the beginning of the process. Inspection occurs at the 50% point. Other information about the job follows:


Units started2,500

Units spoiled315


Direct materials$87,500

Conversion costs on job$262,500

Standard direct material cost per unit$33

Standard conversion cost per unit $97


Spoiled units have no salvage value.



Make necessary journal entries to record all spoilage.




  1. Start by sharing the instructions of your paper with us  
  2. And then follow the progressive flow.
  3. Have an issue, chat with us now


Cathy, CS.