Our Recommendations :-
Follow CA CPT | CA Foundation FB Page

what is treatment of defective in cost accounting ?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Uma asked almost 3 years ago

    0       0 Answer Now Comment Report
8 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Pankaj answered over 2 years ago

Defectives’ signify units or portion of production which can be rectified and turned out as good units by the application of additional materials, labour or other services. Defectives arise due to sub-standard materials, inadequate equipment, inefficient supervision, defective planning and poor workmanship, etc. Usually, it is possible to avoid defects in the units produced but to some extent defectives may be unavoidable. The basic difference between ‘defectives’ and ‘spoilages’ is that the former can be sold after rectifying them whereas the latter has got to be rejected or sold as sub-standard or rejected articles

    0       0 Comment Report
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Pankaj answered over 2 years ago

Meaning Of Defective Units The faulty or substandard finished goods or spoilage are called defective units. Defective goods arise due to sub-standard materials, bad supervision, bad planning of production, poor workmanship, inadequate equipment, careless inspection etc. Defective units can be rectified and turned out as good unit by re-processing. Such re-processing work may need the use of additional material, labor and expenses. Following methods may be adopted for the treatment of this cost: ~If the defective production is identified with a specific job or department, the cost of rectification is charged to that specific job or department. ~If the defective production is not identified with a particular job or department, the cost of rectification is added to general factory overhead.

    0       0 Comment Report
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered over 2 years ago

**Defective products or units are** those which do not meet with dimensional or quality standards and are reworked for rectification of defects by application of material, labour and/or processing and salvaged to the point of either standard product or sub­standard product to be sold as seconds. Therefore, defectives are that portion which can be rectified at some extra cost of re-opeDefectives may arise due to the following reasons:ration. **** 1. Sub-standard materials. 2. Poor workmanship. 3. Poor maintenance of machines. 4. Wrong tool setting. 5. Faulty design of products. 6. Bad supervision. 7. Careless inspection. 8. Poor working conditions. 9. Lack of control, such as humidity, furnace temperature etc. 10. Excessive short runs. **Following methods may be adopted for the treatment of this cost:** If the defective production is identified with a specific job or department, the cost of rectification is charged to that specific job or department. If the defective production is not identified with a particular job or department, the cost of rectification is added to general factory overhead. If the defective production is due to abnormal reasons, the rectification cost is transferred to Costing Profit and Loss Account.

    0       0 Comment Report
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered over 2 years ago

Dear Friend, **Meaning Of Defective Units** The faulty or substandard finished goods or spoilage are called defective units. Defective goods arise due to sub-standard materials, bad supervision, bad planning of production, poor workmanship, inadequate equipment, careless inspection etc. Defective units can be rectified and turned out as good unit by re-processing. Such re-processing work may need the use of additional material, labor and expenses. Following methods may be adopted for the treatment of this cost: ~If the defective production is identified with a specific job or department, the cost of rectification is charged to that specific job or department. ~If the defective production is not identified with a particular job or department, the cost of rectification is added to general factory overhead. ~If the defective production is due to abnormal reasons, the rectification cost is transferred to Costing Profit and Loss Account.

    0       0 Comment Report
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered almost 3 years ago

If the defective production is identified with a specific job or department, the cost of rectification is charged to that specific job or department. If the defective production is not identified with a particular job or department, the cost of rectification is added to general factory overhead.

    1       0 Comment Report
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered almost 3 years ago

**TREATMENT OF DEFECTIVES IN COST ACCOUNTING** Charged to good output -- the entire cost of rectification of normal defective is charged to good units. Charged to general overhead--If the responsible department is not identified correctly,then the rectification costs are charged to general overheads. Charged to specific jobs-- If it is easily identified with specific job,the rectification costs should be charged to that job. Thanks

    1       0 Comment Report
Data?1494421730 rohit awasthi answered almost 3 years ago

Hii Defectives ‘Defectives’ signify units or portion of production which can be rectified and turned out as good units by the application of additional materials, labour or other services. Defectives arise due to sub-standard materials, inadequate equipment, inefficient supervision, defective planning and poor workmanship, etc. Usually, it is possible to avoid defects in the units produced but to some extent defectives may be unavoidable. The basic difference between ‘defectives’ and ‘spoilages’ is that the former can be sold after rectifying them whereas the latter has got to be rejected or sold as sub-standard or rejected articles. The normal defectives are unavoidable and can be identified with specific jobs and their cost of rectification can be attributed to the job. But if the defective production cannot be identified with the specific jobs, the cost of defectives should be added to the factory overheads. In case of defectives arising due to abnormal circumstances, the cost of rectification is treated as an abnormal loss and charged to the Costing Profit and Loss Account.

    3       0 Comment Report
Open uri20170510 32134 1nqu8aj?1494421649 sowmya answered almost 3 years ago

Hii Meaning Of Defective Units Defective products or units are those which do not meet with dimensional or quality standards and are reworked for rectification of defects by application of material, labour and/or processing and salvaged to the point of either standard product or sub­standard product to be sold as seconds. Therefore, defectives are that portion which can be rectified at some extra cost of re-operation. Following methods may be adopted for the treatment of this cost: 1. If the defective production is identified with a specific job or department, the cost of rectification is charged to that specific job or department. 2. If the defective production is not identified with a particular job or department, the cost of rectification is added to general factory overhead. 3. If the defective production is due to abnormal reasons, the rectification cost is transferred to Costing Profit and Loss Account.

    0       0 Comment Report
Get Notifications
Videos
Books
Notes
Loading
SIGN UP
Watch best faculty demo video classes

These top faculty video lectures will
help u prepare like nothing else can.