Everything you need to know about material losses in Cost Accounting. Losses of materials may arise during handling, storage or during process of manufacture. In the process of handling, storage and usage of materials, a part of the materials may be wasted, spoiled or scrapped and thus lost. The problems of wastage, spoilage and scrap are common to all manufacturing [...]
The material requirements of production are issued on the basis of material requisitions. The output is obtained along with wastage, scrap, spoilages and defectives. The accurate cost of output can be computed after taking the losses into account. Losses in the form of waste, scraps, spoilage and defectives are inherent and inevitable with any manufacturing activity. These losses can be [...]
Following are the forms of material losses: 1. Waste or Wastage 2. Scrap 3. Spoilage. Form # 1. Waste or Wastage: Waste is that portion of a basic raw material lost in processing, having no recovery value. So waste is a type of material loss which arises in the course of production and has no value. It may be visible [...]