Which of the Following Statements Is True of Normal Spoilage

question 83

Multiple Choice

Which of the following statements is true of normal spoilage and abnormal spoilage?

• A) Normal spoilage is inherent in a particular production process, whereas abnormal spoilage is not inherent in a particular production process.
• B) Abnormal spoilage arises even when the process is carried out in an efficient manner, whereas normal spoilage does not arise when the process is carried out in an efficient manner.
• C) Normal spoilage is usually regarded as avoidable and controllable, whereas abnormal spoilage is unavoidable and uncontrollable.
• D) The costs of normal spoilage are recorded as a loss as a separate line item in an income statement, whereas costs of abnormal spoilage are included as a component of the costs of good units manufactured.

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Definitions:

Gift

Something given voluntarily without payment in return, as to show favor toward someone or honor an occasion.

Ownership Interest

A legal or equitable right, claim, or stake in property, giving the holder some degree of control or participation in the property's benefits, like income, or decision-making.

General Partner

An owner of a partnership who has unlimited liability and is responsible for managing the business.

Contributes Capital

The act of providing financial resources or assets to a business or investment with the expectation of gaining a return.