Question 1
How can a company account for scrap? Include in your explanation a discussion of the two aspects of accounting for scrap.
Question 2
You are the chief financial officer of a lumber mill, and you are becoming quite concerned about the spoilage, scrap, and reworked items associated with your production processes. Your firm produces mainly products for the building industry.
Required:
Discuss the problems associated with these items and the methods your company can use to reduce spoilage, scrap, and reworked items.