Sale proceeds of normal scrap arising in the factory are generally treated in the cost sheet as:

Correct answer: C) A deduction from the works (factory) cost

Explanation

Scrap arising in the normal course of production reduces the cost of manufacture, so its realisable value is deducted in arriving at works cost (and hence cost of production). Showing it as sales or in the Costing Profit and Loss Account would overstate the cost of production.