[smyoung0521]

Hi, I just purchased the notes and have started going through them. I ran across something that I needed clarification on and wasn’t sure where to ask. So first off my question is, ‘Where do we ask questions?’ Secondly, in case it is here, I am looking at BEC notes page 41 discussing Factory Overhead. I can’t tell if the notes are implying that spoilage goes under factory overhead or not. I thought spoilage (normal) was part of direct materials so therefore would not be a part of factory overhead. Which is correct? Thanks and I am happy to move this question to wherever it should be at. I just wasn’t sure so I figured I would ask here.

Restarting my journey!
Using Rogers and supplementing with Ninja

[Anonymous]

I'm 99% sure normal spoilage is part of factory overhead, because it's a recurring cost not related to a final product. Well, it's related, but it's not a final product. So it's part of overhead, since that way the cost is allocated to the non-spoiled goods. Abnormal spoilage isn't part of overhead, though.

[smyoung0521]

Thanks Elisabeth, My other notes, MDS, has it as part of direct materials and even has questions having it as part of direct materials….looks like you might be right though as Wiley has it in overhead as well unless dealing with job costing. Got to love the differing rules….

Restarting my journey!
Using Rogers and supplementing with Ninja

[Anonymous]

I'm not familiar with MDS – what's the full name for that company? (I get lost sometimes with the abbreviations. 🙂 ) Or do they just go by MDS? I'd suggest Googling the question to see what the general consensus is, since your 2 sets of study materials differ. On the whole, I really like Wiley, but I know that even the best materials have errors sometimes!

[Anonymous]

@smyoung0521 – if you're using MDS, why not just email Steve directly like he suggests at the beginning of all his lectures? He responds back within 5 minutes every time!

[Author]

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