ECONOMICS

Detailed explanation-1: -Normal Output = Units introduced – Units of normal loss Normal Cost of Normal Output = Total Cost – Scrap value of Normal Loss. and if there is any scrap value then that will be shown in amount column of the credit side corresponding to lost units.

Detailed explanation-2: -NB2: Normal output is also referred to as good output. NB3: Good output is the only number of units used in computation of cost per unit/average cost used when transferring output from the current process account to the next one or to the finished goods account.

Detailed explanation-3: -1 An abnormal loss occurs when expected output exceeds actual output.

Detailed explanation-4: -Normal loss means that loss which is inherent in the processing operations. It can be expected or anticipated in advance i.e. at the time of estimation. Accounting Treatment: The cost of normal loss is considered as part of the cost of production in which it occurs.