In a Process Cost System,the Cost Attributable to Abnormal Losses

question 48

Multiple Choice

In a process cost system,the cost attributable to abnormal losses that occur due to unexpected circumstances such as machine operator error should be assigned to:

• A)Ending work in process inventory.
• B)Cost of goods manufactured and ending work in process inventory in the ratio of units worked on during the period to units remaining in work in process inventory.
• C)A separate loss account in order to highlight production inefficiencies
• D)Cost of good manufactured (transferred out)

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Definitions:

Held To Maturity

A classification for debt securities which an investor intends and is able to hold until maturity, recognizing interest income over the term.

Face Value

The nominal or dollar value printed on a security or instrument, such as a bond or stock, representing its legal value.

Interest

The cost of borrowing money, typically expressed as an annual percentage of the loan or deposit amount.

Unrealized Holding Gain

The increase in value of an asset that is still held by an entity and has not been sold for a profit.