A manufacturing firm may experience both normal and abnormal spoilage in its operations.
The costs of both normal and abnormal spoilage are accounted for in the accounting
records. The costs associated with any abnormal spoilage are

Answer (D) is correct.
Abnormal spoilage should be written-off to a special account that is
separately reported in the income statement. Costs associated with
abnormal spoilage are not inventoried and are therefore treated as a loss
in the period of detection.