Question 1
Companies that attempt to achieve zero defects in the manufacturing process treat spoilage as ________.
◦ scrap
◦ reworked units
◦ abnormal spoilage
◦ indirect spoilage
Question 2
Costs of abnormal spoilage are usually accounted for as ________.
◦ a deduction from the cost of goods sold
◦ a component of the costs of good units manufactured
◦ a separate line item in an income statement
◦ an asset on a balance sheet