Normal and Abnormal Loss
Normal is expected and anticipated loss for which provisions are being made. Normal loss of goods should also be considered while valuing the closing stock or unsold stock. Normal loss means inherent and unavoidable loss. Abnormal loss is a loss that is not expected and take place. Abnormal Loss can be controlled if measures are taken before time. Abnormal Loss can be calculated as normal cost of normal out put by normal output into Abnormal loss quantity.
Learning Objective: Prepare the format of cost of production report. Calculate equivalent units of production. What is the treatment of normal and abnormal loss in process costing system? How the timing of normal and abnormal loss is considered in a cost of production report?
Valuation and Treatment of Normal and Abnormal Loss in Consignment Accounting: Learning Objectives: How are the normal and abnormal losses are calculated and treated in consignment accounting? Normal Loss: Normal loss of goods should also be considered while valuing the closing stock or unsold