The Net Cost of Normal Spoilage in a Job-Order Costing

question 83

Multiple Choice

The net cost of normal spoilage in a job-order costing system in which spoilage is common to all jobs should be

• A)assigned directly to the jobs that caused the spoilage.
• B)charged to manufacturing overhead during the period of the spoilage.
• C)charged to a loss account during the period of the spoilage.
• D)allocated only to jobs that are completed during the period.

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Definitions:

Damage or Destruction

The physical harm or ruin caused to property, environments, or items, which can impact their value, function, or usability.

Non-Merchant

An individual or entity who does not regularly deal in goods of the kind sold or who does not hold themselves out as having special knowledge or skills relevant to the goods involved in the transaction.

Tender of Delivery

The process by which a seller makes goods available to a buyer in fulfillment of a sales contract and notifies the buyer that the goods are ready for receipt.

Destroyed Through Fire

Refers to property or goods that have been damaged or annihilated as a result of fire.