CAF-5 · Chapter 6 · Question 2 of 10
How should the cost of "rectification work" (correcting sub-standard work) be treated in a job costing system if the occurrence is frequent and considered a normal part of the manufacturing process?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) It should be treated as a general production overhead.
Explanation
The text states that rectification work is treated as a production overhead if it is regarded as a normal part of the work and is of a recurring nature. It is only charged as a direct cost if it is infrequent and directly attributable to a specific job.
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