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Normal Loss and Abnormal Loss
Accountancy
Raj of Gwalior consigned 15,000 kgs of Ghee at Rs. 30 per kg to his agent Siraj at Delhi. He spent Rs. 5 per kg as freight and insurance for sending the Ghee at Delhi. On the way 100 kgs. of Ghee was lost due to the leakage (which is to be treated as normal loss) and 400 kgs. of Ghee was destroyed in transit. Rs. 9,000 was paid to consignor directly by the Insurance company as Insurance claim. Siraj sold 7,500 kgs. at Rs. 60 per kg. He spent Rs. 33,000 on advertisement and recurring expenses. In this question, how will the value of abnormal loss be calculated? Will normal loss be deducted first or abnormal loss?
Answers (6)
CA Suraj Lakhotia Admin
total cost/ (total qty - normal loss qty) This will give per unit cost. You can refer to video on normal loss and abnormal loss on our YouTube Channel.
Sir, I did the same but in the ICAI suggested answer they have done: Total cost / Total quantity. That is, they have not deducted the quantity of normal loss before calculating the value of abnormal loss. (Plz see the attachment) I am not able to understand why they did not deduct the quantity of normal loss. Plz explain
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