The costs of normal spoilage are allocated to the units in ending work-in-process inventory, in addition to completed units if the units:

Question

Quizplus · Accepted Answer

Normal spoilage costs should be allocated to the units in ending work-in-process inventory if they have passed the inspection point, as these units are considered to have reached the stage of completion where they have incurred normal spoilage costs. Units that have not yet passed the inspection point are considered to be incomplete and are not subject to normal spoilage costs. The percentage of completion of the unit is not a relevant factor in determining whether normal spoilage costs should be allocated.

The Costs of Normal Spoilage Are Allocated to the Units