Normal spoilage

Normal spoilage is the unavoidable part of spoilage occurs in a production process.

It will occur even the production process is operated with the highest efficiency. That is why it is also known as predetermined or planned spoilage.

Manufacturers typically set a rate of normal spoilage based on their product type.

Cost of normal spoilage is included in the cost of goods produced. Thus, Good units absorb the cost of normal spoilage.