When spoiled goods have a disposal value, the net cost of the spoilage is computed by ________.
A) deducting disposal value from the costs of the spoiled goods accumulated to the inspection point
B) adding the costs to complete a saleable product to the costs accumulated to the inspection point
C) deducting the costs to complete a saleable product from the costs accumulated to the inspection point
D) adding disposal value to the costs of the good units transferred

Question

Quizplus · Accepted Answer

When spoiled goods have a disposal value, the net cost of the spoilage is calculated by deducting the disposal value from the costs of the spoiled goods accumulated up to the inspection point. This is because the disposal value reduces the overall cost of the spoiled goods.

When Spoiled Goods Have a Disposal Value, the Net Cost