In process and job costing system, the normal spoilage cost is considered as ___________?
Correct answer: A. inventoriable costs
- A. inventoriable costs
- B. sunk costs
- C. conversion costs
- D. non inventoriable costs
Explanation
Normal spoilage is an expected part of production, so its cost is absorbed into the cost of the good units produced and remains inventoriable. Abnormal spoilage is generally treated as a loss of the period.
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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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