In a Job-Order Costing System,the Net Cost of Normal Spoilage

question 64

Multiple Choice

In a job-order costing system,the net cost of normal spoilage is equal to

• A)estimated disposal value plus the cost of spoiled work.
• B)the cost of spoiled work minus estimated spoilage cost.
• C)the units of spoiled work times the predetermined overhead rate.
• D)the cost of spoiled work minus the estimated disposal value.

---

Definitions:

LIFO Method

Last In, First Out, an inventory valuation method that assumes goods purchased last are the first to be sold.

Fiscal Year

A one-year period used for financial reporting and budgeting that may not correspond to the calendar year.

Net Realizable Value

The estimated selling price of goods, minus the cost of their sale or completion.

Dollar-Value LIFO

An inventory valuation method that uses the last-in-first-out (LIFO) principle, adjusted for changes in the dollar's value.