Which one of the following is an example of spoilage?
Correct answer: B. defective aluminum cans recycled by manufacturer
- A. short lengths from wood work
- B. defective aluminum cans recycled by manufacturer
- C. detection of defective pieces before shipment
- D. all of above
Explanation
Defective aluminum cans that cannot be sold as intended and are recycled are treated as spoilage. Short wood lengths are scrap, while merely detecting defective pieces is an inspection activity, not spoilage itself.
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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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