The cost of normal spoilage arising from a production process common to several jobs is:

Question

Quizplus · Accepted Answer

Normal spoilage is an expected part of the production process and is a cost of producing all the products. Therefore, it should be charged to overhead and allocated to all jobs along with other overhead costs. Option A is incorrect because normal spoilage is a product cost that should be included in the cost of goods sold. Options B and C are incorrect because normal spoilage should be allocated to all jobs, not just the ones with the greatest or least total cost.

The Cost of Normal Spoilage Arising from a Production Process