Normal loss is ___________in the normal course of events. It is inherent in the physical and chemical reactions that take place in a process.

Related MCQs

• The disposal cost of abnormal loss is included in the abnormal loss account and therefore in the transfer of the cost of abnormal loss to the statement of profit or loss.
• The difference between total actual loss and normal loss is abnormal loss.
• In some cases, a company might have to pay to dispose of losses in a process. The cost of disposal represents an additional cost to the process. To reflect this in the process account the normal loss is measured at zero but the expected costs of disposal are debited to the process account.
• When actual loss exceeds normal loss, there is:
• When actual loss is less than the expected (normal) loss there is:
• If normal loss has a scrap value the company is able to recover some of the input costs to the process. The scrap value reduces the cost of the process.
• When the abnormal has a scrape value the net cost of abnormal loss (cost of abnormal loss minus its scrap value) is then transferred as a cost to the cost accounting income statement at the end of the accounting period.
• If it is assumed that all losses in process occur at the end of the process, units of abnormal loss are costed in exactly the same way in the as units of finished output.
• Normal loss is usually expressed as a percentage of the input units of materials.
• The normal loss is something that is unavoidable in order to get the good output. The cost of the lost units is part of the cost of obtaining the good output.