normal loss

The loss arising from a manufacturing or chemical process through waste, seepage, shrinkage, or spoilage that can be expected, on the basis of historical studies, to be part of that process. It may be expressed as a weight or volume or in other units appropriate to the process. It is usually not valued but if it is, a notional scrap value is used. It is axiomatic in costing that normal losses are part of the normal manufacturing costs, whereas the cost of abnormal losses should not be borne by the good output.
See also: waste

Accounting dictionary. 2014.

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