The costs of abnormal spoilage are written off as a loss; however, the costs of normal spoilage are treated as part of cost of goods manufactured.

Question

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Abnormal spoilage refers to spoilage that is not expected or part of the normal production process, therefore it is written off as a loss. Normal spoilage, on the other hand, is a natural and expected occurrence in the production process and is included in the cost of goods manufactured.

The Costs of Abnormal Spoilage Are Written Off as a Loss;