Costs of abnormal spoilage are NOT considered to be inventoriable costs and are written off as costs of the accounting period in which the abnormal spoilage is detected.

Question

Quizplus · Accepted Answer

Abnormal spoilage is a loss that is not considered a normal part of the production process and cannot be allocated to specific units of production. Hence, the costs of abnormal spoilage are not considered as inventoriable costs and are written off as expenses in the period in which they occur. This is because they do not add any value to the finished product and cannot be sold.

Costs of Abnormal Spoilage Are NOT Considered to Be Inventoriable