191. CSO: 1C2b LOS: 1C2c
A company that uses a process costing system inspects its goods at the 60% stage of
completion. If the firm’s ending work-in-process inventory is 80% complete, how would
the firm account for its normal and abnormal spoilage?
a. Both normal and abnormal spoilage costs would be added to the cost of the good
units completed during the period.
b. Both normal and abnormal spoilage costs would be written off as an expense of
the period.
c. Normal spoilage costs would be added to the cost of the good units completed
during the period; in contrast, abnormal spoilage costs would be written off as a
loss.
d. Normal spoilage costs would be allocated between the cost of good units
completed during the period and the ending work-in-process inventory. In
contrast, abnormal spoilage costs would be written off as a loss.
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