Answer (C) is correct. Spoiled goods are defective items that cannot be feasibly reworked. Traditional cost accounting systems distinguish between normal and abnormal spoilage because, in some operations, a degree of spoilage is operating conditions. It is spoilage that is uncontrollable in the short run and therefore should be expressed as a function of good output (treated as a product cost). Accordingly, normal spoilage is assigned to all good units in process costing systems, that is, all units that have passed the inspection point at which the spoilage was detected. If normal spoilage is attributable to a specific job, only the disposal value of the normally spoiled goods is removed from work-in-process, thereby assigning the cost of normal spoilage to the good units remaining in the specific job. Abnormal spoilage is not expected to occur under normal, efficient operating conditions. The cost of abnormal spoilage should be separately identified and reported. Abnormal spoilage is typically treated as a period cost (a loss) because it is unusual.