Abnormal spoilage
From Wikicpa
Abnormal spoilage is all spoilage which is unexpected and may be avoided by the business management. Abnormal spoilage is considered a controlable item by management. It is a residual that is the difference between normal spoilage and total spoilage.
- Example: If the normally expected spoilage in the production of a widget is 5% and the actual spoilage is 8% then the abnormal spoilage is the 3% difference.
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Accounting
Since the abnormal spoilage is an unexpected expense it is treated as a loss in the income statement.
