Hoyt Co. manufactured the following units:

 Hoyt Co. manufactured the following units:

Saleable    5,000
Unsaleable (normal spoilage)    200
Unsaleable (abnormal spoilage)    300
The manufacturing cost totaled $99,000. What amount should Hoyt debit to finished goods?

$90,000.
$93,600.
$95,400.
$99,000.

 You Answered Correctly!
Normal spoilage is a manufacturing cost because it is an expected and inherent part of production. Thus, it is included in the cost of finished goods. Abnormal spoilage is the amount of spoilage in excess of normal spoilage, and it is treated as a period cost.

The total units completed are 5,500 (5,000 + 200 + 300). Of this total, 5,200 are included in finished goods. Thus, 5,200/5,500 of the total cost incurred is included in finished goods. The remainder is a period cost.

Debit to finished goods = $93,600 = (5,200/5,500)$99,000