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      Question

      In a manufacturing entity, the cost of abnormal waste

      is:
      A Added to closing inventory Correct Answer Incorrect Answer
      B Deferred to next period Correct Answer Incorrect Answer
      C Charged to Cost of Goods Sold Correct Answer Incorrect Answer
      D Capitalized Correct Answer Incorrect Answer
      E Expensed in P&L Correct Answer Incorrect Answer

      Solution

      Abnormal waste is charged directly to the Profit and Loss account and not included in inventory cost.

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