In which of the following ways is abnormal spoilage accounted for?
A) Expensed in the period in which it occurred
B) Included as part of the unit cost of output
C) Written off to cost of goods sold
D) Included in inventory valuation until year-end and then written off

Question

Quizplus · Accepted Answer

Abnormal spoilage is considered an unusual or non-recurring loss that is not part of the normal production process. Therefore, it is expensed in the period in which it occurred, rather than being allocated to the cost of goods produced or sold. This treatment ensures that the costs associated with normal production are not inflated by the costs of inefficiencies or errors that are not expected to recur regularly.

In Which of the Following Ways Is Abnormal Spoilage Accounted