Costs of normal spoilage are usually accounted for as ________.
A) a deduction from the cost of goods sold
B) a component of the costs of good units manufactured
C) a "loss from normal spoilage account" in income statement
D) a liability on a balance sheet

Question

Quizplus · Accepted Answer

Normal spoilage is considered a component of the costs of good units manufactured, as it is an expected outcome of the production process that occurs despite reasonable efforts to prevent it. It is not treated as a loss or a liability, but rather as a cost of producing the final product. Therefore, option A, C and D are incorrect.

Costs of Normal Spoilage Are Usually Accounted for as ________