Abnormal loss

abnormal loss

1. Topic : Abnormal Process Loss By SHIJIN T P M COM (BF) Section A Reg. No:12351047

2. Loss which is controllable and avoidable and which is in excess of normal limits is called abnormal loss. It is caused by unexpected or abnormal condition such as machine break down, carelessness ,accidents, substandard material etc. Abnormal process loss

3. In process A ,100 units of raw materials were introduced at a cost of Rs.1000.the other expenditure incurred by the process was Rs.600.Of the units introduced ,10% are normally lost in the course of manufacture and they possess a scrap value of R s. 7 each. The output of process A was only 75 units. Prepare process account and abnormal loss account Example

4. pariculars units Rs pariculars Units Rs To, raw material To other expenses 100 1000 600 By normal loss By abnormal loss By process B (Out put transfer) 10 15 75 70 255 1275 100 1600 100 1600 Process A a/c

5. particulars units Rs particulars units Rs To Process A a/c 15 255 By cash a/c(15*7) By Costing P/L a/c 15 - 105 150 15 255 15 255 Abnormal loss a/c

6. Working note: Calculation of abnormal loss Normal cost of normal output Units of A. L normal output = 1600-70 100-10 cost of A L = 1530 15 90 =225