Question

difference between normal loss and abnormal loss in consignment

Answer 1

Normal loss is the thing that happens to the item while the production is taking place for instance shrinkage or if the fabric is worn off. Also, in light of the normal loss, the cost tends to increments and result in the expanded cost of production.

The abnormal loss is the one which comes about when something happens incidentally, for instance, the hardware separates or the working conditions are not ideal bringing about the low nature of work, the abnormal loss is dealt with in the profit and loss account.

The estimation of abnormal loss: (normal cost of output/normal output) x Abnormal loss amount.