186. CSO: 1C2a LOS: 1C2c
Darden Manufacturing, a calendar-year corporation, had $17,000 of spoilage during April
that production management characterized as abnormal. The spoilage was incurred on
Job No. 532, that was sold three months later for $459,000. Which of the following
correctly describes the impact of the spoilage on Darden’s unit manufacturing cost for
Job No. 532 and on the year’s operating income?
Unit Manufacturing Cost Operating Income
a. Increase. No effect.
b. Increase. Decrease.
c. No effect. Decrease.
d. No effect. Not enough information to judge.
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