ECONOMICS

Detailed explanation-1: -Normal Losses: Losses which are unavoidable are called Normal losses. Normal losses of material can not be completely avoided but may be controlled to a limited extent . These losses are transferred to factory overheads .

Detailed explanation-2: -Normal losses are due to unavoidable factors. These losses are unexpected or unanticipated by the business. These losses may be loss of goods due to damage while transportation, loading or unloading, leakage etc., circumstances which cannot be completely avoided.

Detailed explanation-3: -Examples of Normal Loss are – Evaporation, Leakage, Breakage, Loss of goods in transit, Reduced Demand.

Detailed explanation-4: -Normal loss occur during process of production which is an unavoidable and uncontrollable loss. A certain percentage is predefined on the basis of historical records. Loss which is over and above the normal loss is an abnormal loss. These losses are controllable and avoidable.

Detailed explanation-5: -Normal loss is the misfortune that happens because of the nature of the products consigned. Its tendency is as per the following: It happens because of unavoidable reasons. It is because of natural losses like misfortunes ordinary spillage, waste, breakdown, evaporation drying, and so on.