Question
A company transfers semi-finished goods from Process 1
to Process 2. Normal loss in Process 1 is 10%. If 10,000 units are input and 8,800 units are transferred, what is the abnormal loss/gain?Solution
Normal loss = 10% of 10,000 = 1,000 ⇒ Expected output = 9,000 units. Actual = 8,800 ⇒ Abnormal loss = 200 units
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