Defective.

Q32. Discuss meaning, accounting treatment and control of defective.
Ans.

Meaning of Defective: It signifies those units or portions of production which can be rectified and turned out as good unit by the application of additional material, labor or other service.


Treatment of Defective: Normal defective charged to particular job or product if defective identified with a particular product or job. If it is not identified with a particular job or product, it is charged to overhead. Abnormal defective net cost charged to profit and loss account.

Control of Defective:
1. A standard should be predetermined for comparison.
2. Proper report to top management.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: