Costs of abnormal 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 separate line item in an income statement
D) an asset on a balance sheet

Question

Quizplus · Accepted Answer

Abnormal spoilage costs are typically accounted for as a separate line item in the income statement. This is because they are considered to be costs that are not expected to occur under normal operating conditions and therefore should not be included in the cost of goods sold or capitalized as an asset.

Costs of Abnormal Spoilage Are Usually Accounted for as ________