Question
A company inputs 300 units into a production process
where the normal loss is 30%. If the actual output is 190 units, what is the amount of abnormal gain or loss?Solution
The normal loss is 30% of 300 units, which equals 90 units. Therefore, the expected output after accounting for a normal loss is 210 units (300 - 90). Since the actual output is 190 units, there is an abnormal loss of 20 units (210 expected units - 190 actual units).
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