Depending on the nature of rework done on a particular unit,the cost can be charged to one of three specific accounts.Which of the following is correct?

Question

Quizplus · Accepted Answer

Abnormal rework is unexpected and arises due to mechanical errors, defective materials or other reasons beyond the control of the production process. This kind of rework is charged to a Loss from Abnormal Rework account because it represents an expense that reduces the profitability of the company. Normal rework, on the other hand, refers to the additional work required to complete a unit that does not involve any defects or errors. If the rework is specific to a particular job, it is charged to the Finished Goods Inventory account of that job. If the rework is common to all jobs, it is charged to the Work-in-Process Inventory account. Therefore, options B, D and E are incorrect.

Depending on the Nature of Rework Done on a Particular