Which of the following choices shows the proper treatment of sales commissions and abnormal spoilage charges when calculating a manufactured good’s inventoriable cost?
Sales commissions        Abnormal spoilage
a.    Include                   Include
b.    Include                   Exclude
c.    Exclude                   Include
d.    Exclude                  Exclude
Answer:D
Choice “d” is correct. The requirement is to identify the proper treatment of the costs.
Answer (d) is correct because both costs are excluded from inventoriable costs. Inventoriable costs include only the normal costs of manufacture of the goods.
Answer (a) is incorrect because commissions are a selling expense and abnormal spoilage is expensed in the period and is not part of inventoriable costs. Answer (b) is incorrect because commissions are a selling expense.
Answer (c) is incorrect because abnormal spoilage is expensed in the period and is not part of inventoriable costs.