Short note on normal wastage and abnormal wastage
Understand the Problem
The question is asking for a brief explanation of the concepts of normal wastage and abnormal wastage, which likely relates to materials management or production processes.
Answer
Normal wastage is expected loss; abnormal wastage is due to mishandling.
Normal wastage refers to expected and unavoidable losses incurred during a manufacturing process due to natural factors. Abnormal wastage arises from mishandling, carelessness, or unplanned events, and it is not part of regular production costs.
Answer for screen readers
Normal wastage refers to expected and unavoidable losses incurred during a manufacturing process due to natural factors. Abnormal wastage arises from mishandling, carelessness, or unplanned events, and it is not part of regular production costs.
More Information
In cost accounting, distinguishing between normal and abnormal wastage helps businesses identify areas for process improvement versus understanding inevitable costs. Proper management and classification of these losses can aid in more accurate financial reporting and cost control.
Tips
A common mistake is to consider all wastage as avoidable and not differentiating between what is expected and what is unexpected, which can lead to inaccurate cost analysis.
Sources
- Difference Between Normal Loss and Abnormal Loss - GeeksforGeeks - geeksforgeeks.org
- What Is Normal & Abnormal Wastage? - Finance Strategists - financestrategists.com
- Abnormal Spoilage 101: Causes, Calculation, and Prevention ... - shipbob.com
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