In a process costing system,the cost of abnormal spoilage should be:
A)Prorated between units transferred out and ending inventory.
B)Included in the cost of units transferred out.
C)Treated as a loss in the period incurred.
D)Ignored in the period incurred.

Question

Quizplus · Accepted Answer

Abnormal spoilage is considered as an unusual and unexpected loss of materials and products. It should be treated as a loss in the period incurred because it is not a normal or expected cost of production. Therefore, it should be expensed immediately rather than being included in the cost of units transferred out or prorated between units transferred out and ending inventory.

In a Process Costing System,the Cost of Abnormal Spoilage Should