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Question

Normal Loss is generally determined as a % of which among the following?

A Input Correct Answer Incorrect Answer
B Output Correct Answer Incorrect Answer
C Input- Normal loss units Correct Answer Incorrect Answer
D Input – Abnormal loss units Correct Answer Incorrect Answer
E Any of the above as per company policy Correct Answer Incorrect Answer

Solution

Normal Losses – amount of loss which can’t be avoided because of the nature of material or process. This loss is expected under normal conditions. Example – unavoidable spoiled quantities and the cost of it is to be absorbed by good production. Normal Loss is generally determined as a % of Input If Normal Loss is physically present in the form of scrap, it may have some value and will be credited to Process A/c.

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