A leather shoe manufacturer makes "duck" boots that consist of leather and rubber. Some of the books are defective and are sold in the factory store at deep discounts. Leather strips from the cutting process and rubber shavings are byproducts of the process. The leather strips have no use and are discarded while the rubber scraps are collected and periodically picked up by a recycling company at no cost to the shoe manufacturer. Which of the following classifications of these items would be accurate?
◦ the defective boots are spoilage and the leather and the rubber are scrap
◦ the defective boots, leather and rubber are scrap but the shoes are more valuable scrap as they can be sold
◦ the defective boots are spoilage , the leather strips are scrap, and the rubber is rework
◦ all three items are spoilage
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