Answer (B) is correct . By-products are products of relatively small total value that are produced simultaneously from a common manufacturing process with products of greater value and quantity (joint products).
Answer (A) is incorrect because Scrap consists of raw materials left over from the production cycle but still usable for purposes other than those for which they were originally intended. Scrap may be sold to outside customers, usually for a nominal amount, or may be used for a different production process.
Answer (C) is incorrect because Waste is the amount of raw materials left over from a production process or production cycle for which there is no further use. Waste is usually not salable at any price and must be discarded.
Answer (D) is incorrect because 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.
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