which of the following is a period cost rather than a product cost of a manufacturer? a. abnormal spoilage. b. direct materials. c. variable overhead. d. fixed overhead.

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15-11-2022
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which of the following is a period cost rather than a product cost of a manufacturer? a. abnormal spoilage. b. direct materials. c. variable overhead. d. fixed overhead.

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shomerajeshwari90 shomerajeshwari90 · Answer 1 · 2022-11-18T07:50:56+01:00

Abnormal spoilage is period cost rather than a product cost of a manufacturer. So, th correct answer is (a).

Period costs are any expenditures a business has that are unrelated directly to the manufacturing process. In other words, assets have nothing to do with a company's inventory costs or the price of a single product. Therefore, during a designated accounting period, businesses include period costs in a financial statement.

When a company sees more loss or damage of inventory than would be typical for regular business or manufacturing processes, this is known to as abnormal spoilage. Normal spoiling is regarded to be least partially avoidable and can be brought on by faulty equipment or inefficient processes.

Abnormal spoilage is documented independently from regular deterioration on internal documents and financial statements in accounting and is treated as an expenditure item.

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