Today, in this video, we will teach you about the simple steps to treat of normal and abnormal loss in process costing. You know that when we made any finished product, it comes from different process. For example, I am talking about a new bike. One part is manufacturing in other place and other part is manufacturing in other place and then it will be assemble in other place. So, all are process for making bike. So, there is need of calculating process cost. For calculating accurate cost of production, we have to find both normal and abnormal loss units. We do not deduct normal cost from to total cost of production but we deduct only normal loss unit. With this, our unit cost increase and also help for finding abnormal cost. With video, example, we have explained it in detailed.
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