normal losses and abnormal losses - The Book-keepers Forum (UK)

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TOPIC: normal losses and abnormal losses

rafapak

Senior Member

Status: Offline

Posts: 396

Date: Mon Apr 13 20:48 2020

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Hi I know that abnormal loss should be valued just like output is valued , at full cost but I have troubles to find the reason why it should be valued like this. Normal loss can be defective unit of production and no value is given to this unit (I excluded scrap value here). Abnormal loss can also be defective unit but value is given to this unit . Since in both cases we have defective unit why normal loss unit is given no value but abnormal loss unit is given value ? In what way defective unit from normal loss is different when compared to unit from abnormal loss ? Defective unit is defective unit to me. Even if we assume that abnormal loss is avoidable how this contributes to the fact that abnormal loss it valued at full cost and normal loss is not valued at all (Again scrap value is not considered here)?I can't find explanation on my own. Please, help me -- Edited by rafapak on Monday 13th of April 2020 08:55:35 PM __________________

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