In what way is abnormal spoilage treated differently than normal spoilage?

Question

Quizplus · Accepted Answer

Abnormal spoilage is considered an unusual event and is not inherent to the production process. Therefore, it is treated separately from normal spoilage, which is a cost of production and is absorbed as part of the product cost. By treating abnormal spoilage separately, the company can more accurately identify the cause of the spoilage, take corrective action, and avoid future occurrences. Equivalent units are still calculated for both normal and abnormal spoilage, but abnormal spoilage costs are not assigned to finished goods inventory.

In What Way Is Abnormal Spoilage Treated Differently Than Normal