roblem $5$

BPW Incorporated produces perishable frozen food items for sale in grocery stores across the USA. During

November, BPW produces a goods with a total manufacturing cost of $$10,000,000.$ BPW$\text{'}$s operational manager

expects $2\%$ of goods manufactured will spoil prior to sale. Due to a transport error, an entire shipment of

product in the Florida panhandle region thawed and was ruined. The shipment has a production cost of

$$100,000$ and a sales value of $$115,000.$ Other spoilage in November, besides the transportation error, totaled

$$200,000.$

A$.$ What is BPW$\text{'}$s normal spoilage for November $($if any$)?$

B$.$ What is BPW$\text{'}$s abnormal spoilage for November $($if any$)?$

C$.$ How much spoilage would be accounted for as a loss on the income statement?