Accountancy, asked by princey6720, 11 months ago

Explain how normal and abnormal waste are treated in cost accounts

Answers

Answered by ChackoJacob
1

Explanation:

Normal Waste:

It is the loss which is unavoidable on account of inherent nature of material. Some materials such as liquid materials lose their weight due to evaporation. ... As waste has practically no value, its treatment in costing is relatively simple. The normal process loss is recorded only in terms of quantity.

The treatment of normal loss is to charge it to consignment account. The total cost of goods sent is charged to the units remaining. Value of stock is inflated to cover the normal loss. In other words such loss

Answered by yaduvanshiricha
0

Types of Waste: Spoilage

The costs from normal and abnormal spoilage should be accounted for separately and are treated differently. Normal spoilage is assigned directly to the job or production run. Abnormal spoilage is written off as a loss during the period.

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