Question

Where are abnormal amounts such as spoilage of production costs allocated to? Cost of goods sold Overhead Materials and labor WIP

Answer 1

Abnormal amounts such as spoilage of production costs are allocated to the Cost of Goods Sold (COGS), Materials and Labor, and Work in Process (WIP).

Step-by-step explanation:

Abnormal amounts such as spoilage of production costs are allocated to the Cost of Goods Sold (COGS), Materials and Labor, and Work in Process (WIP).

The Cost of Goods Sold represents the cost of producing or purchasing the goods that are sold by a company. This includes direct production costs such as raw materials and direct labor, as well as indirect production costs like overhead and spoilage.

Materials and Labor refer to the direct costs incurred in the production process, such as the cost of raw materials and the wages of the workers involved in production.

WIP refers to the partially completed goods that are still in the production process. It includes the cost of materials, labor, and overhead that have been incurred up to the stage of production.