Question

12,000 kg of material was put into a process in a period. The normal loss is 10% of input. No opening or closing Work-in-Progress (WIP) is there. Output in the period is 10,920 kg. The abnormal loss/gain is:

• A. Abnormal gain of 120 kg
• B. Abnormal loss of 120 kg
• C. Abnormal gain of 1,080 kg
• D. Abnormal loss of 1,080 kg

Hint:

Actual output>Expected output → Abnormal gain.

Answer 1

The Correct Option is A

Input material: 12,000 kg
Normal loss: 10% of input (1,200 kg)
Expected output: 12,000 kg - 1,200 kg = 10,800 kg
Actual output: 10,920 kg
An abnormal gain is observed as the actual output exceeds the expected output.
Abnormal gain: 10,920 kg - 10,800 kg = 120 kg
Conclusion: An abnormal gain of 120 kg occurred.