If the units of normal spoilage are 150 and the total good units manufactured are 1500, then the normal spoilage rate would be __________?
Correct answer: C. 10%
- A. 14%
- B. 15%
- C. 10%
- D. 12%
Explanation
Using the figures given, the spoilage rate is 150 divided by 1,500, which equals 10%. Therefore, option c matches the calculation, although some costing conventions use total input units as the denominator.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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