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Should the company treat as normal spoilage or abnormal

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Reference no: EM132530614

Tip Top is a reputed ice cream manufacturing company. While performing a recent quality check, the company's production department found that one batch of ice cream (amounting $10,000) did not meet the quality standard. As a result, the whole batch of ice cream was discarded. Further investigation revealed that some newly joined workers were mainly responsible for the above quality problem.

Required:

Question i. Should the company treat $10,000 as normal spoilage or abnormal spoilage? Explain your answers along with any assumptions that you have made. ????

Question ii. With reference to your answers to (i), how should the company account for $10,000?

Reference no: EM132530614

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