Inspection point
Inspection point is the stage in a process where units are checked for quality, fixing how far spoiled units were processed and so how much cost normal and abnormal loss carry.
See it move
Loading infographic...
A process inspects units at 80% completion for conversion costs, with materials added in full at the start. Materials cost €8 per unit and conversion €10 per fully completed unit, so a spoiled unit carries the full €8 of materials plus 80% of €10, or €8, of conversion — €16 in total. Sixty spoiled units at that point carry 60 times €16, or €960.
Where it fits
SubjectCost AccountingAdvancedTopicJoint Products, By-Products & SpoilageAdvanced