The type of process loss that should not affect the cost of inventory value is _________.
A. abnormal loss
B. normal loss
C. seasonal loss
D. standard loss
Answer: Option A
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Related Questions on Costing
Basic objective of cost accounting is ________
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.
Process costing is suitable for ________.
A. hospitals
B. oil refing firms
C. transport firms
D. brick laying firms
The cost which is to be incurred even when a business unit is closed is a _____.
A. imputed cost
B. historical cost
C. sunk cost
D. shutdown cost
The correct option is ✅ A. abnormal loss.
Explanation
In process costing, abnormal loss is caused by unexpected or avoidable conditions such as negligence, accidents, plant breakdowns, or inefficiencies. Because these losses are not an inherent part of the production process, they are excluded from the total production cost and do not affect the cost per unit of the product. Instead, the cost of abnormal loss is transferred directly to the Costing Profit and Loss Account as an expense for the period.
B should be correct
option B as it should not effect the cost
Can u expalin the reason??