Question
400 units were introduced in a process in which 40 units
is the normal loss. If the actual output is 300 units, then there is:Solution
To find out if there's any abnormal loss or gain, we compare the actual output with the expected output (excluding normal loss). Expected output (excluding normal loss) = Total units introduced - Normal loss Expected output = 400 units - 40 units = 360 units Actual output is given as 300 units. Since the actual output (300 units) is less than the expected output (360 units), there is a shortfall of 60 units. This shortfall of 60 units represents abnormal loss because it is beyond the normal loss of 40 units.
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