Eldervale Winery Produces Premium Wine in the Hunter Valley

Eldervale Winery produces premium wine in the Hunter Valley. During the bottling process, small amount of spillage is often unavoidable. How should the costs associated with the spillage be treated?

A) It should be included in the work in progress.
B) It should be expensed in the period the cost is incurred.
C) It should be ignored in the work in progress account and reported only in the internal production reports.
D) It should be expensed immediately under the FIFO method, but included in the work in progress in the weighted average method.

Correct Answer:

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