ECONOMICS

Detailed explanation-1: -Abnormal loss arises due to certain conditions like theft of goods, damage to goods due to substandard material, faulty equipment or natural calamities like fire, earthquake, floods, etc.

Detailed explanation-2: -The meaning of abnormal loss is any accidental loss to the consigned goods or loss caused by carelessness. Examples of such losses are loss by theft or loss by fire, earthquake, flood, accidents, war, loss in transit, etc. Such losses are considered abnormal.

Detailed explanation-3: -Meaning. Normal Loss is a loss that takes place due to the inherent nature of the raw materials and process of production under ordinary circumstances. Abnormal Loss refers to a loss that arises due to unexpected events like defective material, carelessness, machinery breakdown, etc.

Detailed explanation-4: -If the real production units are more than the expected units after deducting the ordinary or normal loss, the contrast between the two is known as abnormal gain. It is avoided from the total cost because of which it doesn’t influence the expense or cost per unit of the item.

Detailed explanation-5: -Abnormal Gain: If the actual production units are more than the anticipated units after deducting the normal loss, the difference between the two is known as abnormal gain. It is excluded from total cost due to which it does not affect the cost per unit of the product.