The units of normal spoilage are divided to total completed units, rather than total actual produced units to calculate ____________?
Correct answer: A. normal spoilage rates
- A. normal spoilage rates
- B. abnormal spoilage rates
- C. normal scrap rates
- D. abnormal scrap rates
Explanation
The normal spoilage rate uses normal spoilage units as the numerator and total completed good units as the denominator. Normal spoilage is expected during efficient production, so it is assigned to the good output.
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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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