Abnormal Spoilage

Any wastage which is excess from normal wastage in the production process will be abnormal spoilage or wastage. We can not control on normal spoilage but abnormal spoilage can be stopped with effective control.


Following are the  main examples of abnormal spoilage.

1. More Scrap than normal  in production due to appointing unskilled laborers. It means, if we will give training first, this loss can be decreased.
2. Loss due to defects in the machine of factories. This is abnormal spoilage. This loss can be decreased by proper maintenance of machine. Like service of car after some time, there is also need of service of your machine after some time for reducing the cost of loss of this abnormal spoilage. 
3. Loss due to less supervision. For example, if there is no supervisor in the factory, some laborers will be idle in the duty time. Due to this, production will decrease. So, this is abnormal spoilage and we can decrease it by appointing supervisors. 

In accounting, we calculate the loss of abnormal spoilage and it is shown in the books of account like other losses of business. It is the decrease of invested capital. So, its direct effect will be on our return on investment.