Material Management and Control-A Managerial View

A few methods of accounting for scrap materials you may know. Which method do you think  as most accurate?

An item of inventory purchased this accounting period for $15 has been written down to its current replacement cost of $10. It sells for $30 with disposal costs of $3 and normal profit of $12. Which of the following statements is not true? 

(a) The cost of goods sold of the next year will be understated.
(b) The current year's income is understated.
(c) The closing inventory of the current year is understated.
(d) Income of the next year will be understated.

Which procedures would you adopt in order to deal with the following items listed in the materials ledger cards:

(a) Scrap delivered to the warehouse
(b) Return of materials to warehouse in excess of production requirements
(c) Gain or loss in weight through climatic conditions while in warehouse
(d) Short lengths of material cut to waste during the productive operations
(e) Breakage in the warehouse

In charging out materials, how would you account for the cost of the following forms of waste:

(a) Sawdust; split, broken, and short ends of boards; and shavings from planing machines in lumber mills
(b) Off-cuts in cutting paper linings and wrappers
(c) Off-cuts and broken pieces in foil wrapping
(d) Scraps in suit and dress factories
(e) Turnings from engine lathes