Answer (D) is correct . Abnormal spoilage is spoilage that is not expected to occur under normal, efficient operating conditions. The cost of abnormal spoilage should be separately identified and reported to management. Abnormal spoilage is typically treated as a period cost (a loss) because of its unusual nature.
Answer (A) is incorrect because Perfection standards are based on perfect operating conditions, and negative deviation from such standards is expected.
Answer (B) is incorrect because Abnormal spoilage may result from any of a variety of conditions or circumstances that are usually controllable by first-line supervisors.
Answer (C) is incorrect because Abnormal spoilage may result from any of a variety of conditions or circumstances that are not necessarily related to standards.
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