Abnormal Spoilage

Spoilage, or waste, of a product that occurs due to inefficiency in the process of making that product. Unlike normal spoilage, it is recorded on a balance sheet as a loss rather than a cost. While normal spoilage is seen as inevitable, companies seek to create processes to reduce or eliminate abnormal spoilage.

References in periodicals archive ?

These are considered abnormal spoilage, because of the unexpected nature of the cause, and thus are recorded as scrap.

The fable reinforces and/or introduces many concepts of process costing including normal and abnormal spoilage and materials introduced in terms of output and could be adapted to a form similar to the text used in the course.

SOLUTION TO COST OF PRODUCTION REPORT AND JOURNAL ENTRIES FOR SPOILAGE Chocolate Queen's Factory Cost of Production Report--Weighted Average--Department M For the Month Ending-- Direct Material Totals: Conversion Costs Units in Process: WIP Beginning 500 Started during current 20,000 Total Units in Process 20,500 Units at End of Period: Equivalent Units Good Units Completed (Transferred) 15,500 15,500 15,500 Normal spoilage 800 800 800 Abnormal spoilage 200 200 100 Ending WIP 4,000 4,000 1,200 Total Units at End: 20,500 20,500 17,600 Costs In the Process: WIP Beginning $ 6,000 $ 5,000 $ 1,000 Added this period 247,090 210,250 36,840 Total to Account for: $253,090 215,250 $37,840 Unit Costs: $12.