Answer:
D. Treated as a loss in the period incurred.
Explanation:
The process-costing system is used by firms that produce goods that goes through a set of manufacturing departments i.e it's used when firms mass produce nearly identical or similar units through various processes.
Under process-costing system, direct costs of production are accumulated, summarized, and then assigned to all the units produced during the period.
Thus, a single product cost is calculated by dividing process cost in each manufacturing department by the respective units produced during the production period.
Some organizations that use the process-costing system are oil refineries, chemical processing companies, eraser manufacturing companies, and food production companies.
In a process-costing system, the cost of abnormal spoilage should be treated as a loss in the period incurred.
The abnormal spoilage refers to the cost exceeding normal level, associated with spoiled units of a manufacturing process. It should be treated as a loss in the period incurred because it cannot be recovered
