Scrap
Scrap is residual production material with minimal salvage value, such as metal off-cuts or fabric trimmings. Net proceeds from selling scrap reduce manufacturing overhead or the cost of the specific job that produced it.
See it move
When off-cuts from Job 88 sell for €150 net, that amount reduces Job 88's own cost, benefiting the customer who ordered it. When scrap cannot be traced to one job, such as €400 of mixed trimmings, the net proceeds are credited to manufacturing overhead instead, spreading the benefit across all production. Traceability alone decides which treatment applies.
Check yourself
A timber workshop's CNC cutting machines leave off-cuts each month with a reliable scrap sale value of €800. The off-cuts cannot be traced to any specific customer job. How should the €800 monthly scrap proceeds be treated in the accounts?