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Loss in excess of the predetermined normal loss is treated as
Anormal loss
Babnormal loss
Cscrap value
Dequivalent units
Answer & Solution
Correct answer: B. abnormal loss
1. Normal loss is the level that could be anticipated in advance.
2. Anything beyond that predetermined level is abnormal process loss.
3. It arises from carelessness of workers, bad plant design or operation, or sabotage.
4. Because it cannot be estimated in advance, it is charged separately rather than absorbed.
_Source: ICAI Cost and Management Accounting Ch10 'Process and Operation Costing', section 10.3_
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