A machine shop manufactures a stainless-steel part that is used in an assembled product. Materials charged to a particular job amounted to P6,000. At the point of final inspection, it was discovered that the material used was inferior to the specifications required by the engineering department; therefore, all units had to be scrapped. The revenue received for scrap is to be treated as a reduction in manufacturing cost but cannot be identified with a specific job. A firm price is not determinable for the scrap until it is sold. It is sold eventually for P7,500. How much is the scrap revenue to be recorded?
A machine shop manufactures a stainless-steel part that is used in an assembled product. Materials charged to a particular job amounted to P6,000. At the point of final inspection, it was discovered that the material used was inferior to the specifications required by the engineering department; therefore, all units had to be scrapped. The revenue received for scrap is to be treated as a reduction in manufacturing cost but cannot be identified with a specific job. A firm price is not determinable for the scrap until it is sold. It is sold eventually for P7,500. How much is the scrap revenue to be recorded?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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A machine shop manufactures a stainless-steel part that is used in an assembled product. Materials charged to a particular job amounted to P6,000. At the point of final inspection, it was discovered that the material used was inferior to the specifications required by the engineering department; therefore, all units had to be scrapped.
The revenue received for scrap is to be treated as a reduction in
How much is the scrap revenue to be recorded?
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