Defective And Spoiled Goods

What is the Difference in Defective Goods and Spoiled Goods?

There is a fundamental difference between the two. A defective good is a good in which there is a manufacturing fault or defect, but this fault can be removed by applying additional cost called rectification cost.

Whereas in case of Spoiled goods, the goods have been spoiled or destroyed, and can not be repaired. So it will be sold as a scrape

Below is given the treatment of both Defective Good (Rectification Cost) and Spoiled Goods (Cost Already Incurred).

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