The way the spoilage cost is treated in the accounting records depends on whether the spoilage is considered normal or abnormal.

Name: The way the spoilage cost is treated in the accounting records depends on whether the spoilage is considered normal or abnormal.
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Question

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Normal spoilage costs are anticipated and included in the cost of goods manufactured, while abnormal spoilage costs are not expected in the normal course of production and are recorded as a separate expense, reflecting inefficiency.

The Way the Spoilage Cost Is Treated in the Accounting