If a company inspects units only at the end of the production process, the units in ending work-in-process inventory are not assigned any costs of normal spoilage.

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If a company inspects units only at the end of the production process, the units in ending work-in-process inventory are not assigned any costs of normal spoilage. This is because normal spoilage is an expected and unavoidable part of the production process, and its cost is typically absorbed as a part of the production overhead. However, if the company were to inspect and account for normal spoilage at each stage of the production process, then the units in ending work-in-process inventory would be assigned a prorated share of these costs.

If a Company Inspects Units Only at the End of the Production