PRC-1 · Chapter 7 · Question 55 of 100
How must the cost of abnormal wastage of materials and labor be treated under IAS 2?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Recognized as an expense in the period in which it is incurred.
Explanation
Abnormal amounts of wasted materials, labor, or other production costs are expressly excluded from the cost of inventories and must be charged as an expense in the Profit or Loss account immediately.
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