Abnormal Spoilage
What is Abnormal Spoilage?
If the production waste is greater than the normally expected level then that will be called Abnormal Spoilage. There are several reasons that can occur Abnormal Spoilage, among them incorrect operator training, sub-standard materials quality, and incorrect machine settings are remarkable.
Example of Abnormal Spoilage:
If production is running with an expected spoilage rate of 10% and this year they produce $1,000,000 of products the spoilage should be: (1,000,000*10%). Which is $100,000. But the actual amount of spoilage was $110,000. So the Abnormal Spoilage will be (Actual Spoilage - Budgeted Spoilgae), or $10000.
