Detailed Answer
Answer (A) is correct.
REQUIRED: The abnormal spoilage for the period.
DISCUSSION: The company’s abnormal spoilage for the period can be calculated as follows:
Beginning inventory 2,200
Add: Started and completed 4,000
Less: Transferred out (3,000)
Less: Ending inventory (1,500)
Total spoilage for period 1,700
Less: Normal spoilage (1,000)
Abnormal spoilage for period 700
Answer (B) is incorrect. The normal spoilage for the period is 1,000 units. Answer (C) is incorrect. The total spoilage for the period is 1,700 units. Answer (D) is incorrect. Failing to subtract the ending inventory to arrive at total spoilage results in 3,200 units.