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CMA Intermediate · Cost Accounting · Job Costing

In job costing, the cost of normal spoilage that arises because of the specific requirements of a particular job is generally treated as:

Normal spoilage arising from the special requirements of a particular job is charged to that job, because the loss is caused by that job alone. Only spoilage that is normal and common to all jobs is absorbed through factory overheads.

  1. ACharged to that specific jobCorrect
  2. BCharged to factory overheads and spread over all jobs
  3. CWritten off to the Costing Profit and Loss Account
  4. DCredited to the scrap account

Explanation

When spoilage is caused by the special specifications of a particular job, the loss is specific to that job, so its net cost is charged to that job. Spreading it over all jobs through overheads applies when spoilage is normal and common to all jobs. Writing it off to the profit and loss account is for abnormal loss.

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