The correct answer is: D. abnormal scrap costing
Abnormal scrap costing is a method of accounting for scrap that is not considered to be a normal part of the production process. This type of scrap is usually caused by accidents, errors, or other unexpected events. Abnormal scrap is typically recorded as a loss on the income statement.
Inventory costing is a method of accounting for the cost of goods sold. This method includes the cost of raw materials, direct labor, and manufacturing overhead. Inventory costing is used to determine the cost of goods sold on the income statement.
Conversion costing is a method of accounting for the cost of goods manufactured. This method includes the cost of direct labor and manufacturing overhead. Conversion costing is used to determine the cost of goods manufactured on the income statement.
Normal scrap costing is a method of accounting for scrap that is considered to be a normal part of the production process. This type of scrap is usually caused by normal wear and tear on equipment or by the nature of the materials being used. Normal scrap is typically recorded as a cost of goods sold.