Answer (D) is correct . Abnormal spoilage is usually charged to a special loss account because it is not expected to occur under normal, efficient operating conditions. Because it is unusual, it should be separately reported as a period cost.
Answer (A) is incorrect because Normal spoilage, not abnormal spoilage, costs are charged to inventory.
Answer (B) is incorrect because Material variance accounts are only charged for the variances in material usage or material price, not the spoilage of product.
Answer (C) is incorrect because While charging abnormal spoilage to manufacturing overhead is an occasional practice, it is not the ordinary practice.
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