Question

A company produces 10,000 units of which 200 are spoiled units because the​ process, even though...

A company produces 10,000 units of which 200 are spoiled units because the​ process, even though carefully and efficiently executed is unable to produce good units​ 100% of the time. Another 130 units are spoiled because machines broke down and there also were operator errors. What is the normal spoilage rate​ (round to two decimal​ places)

A.2.07​%

B. 2​%

C.1.3​%

D. 3.3​%

Business   Accounting   
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Answer #1

Answer is option b. 2%

normal loss is the unavoidable loss of units in a processing department that occurs majorly due to the nature of production operation or the nature of raw materials being processed. 200 spolied unit is normal loss

  

Abnormal loss is the one which is not realized and arises because of bad working conditions, carelessness, rough handling, lack of knowledge, machine breakdown, accident etc 130 units are covered under this.

Normal spoilage ratio. Is 200/10000 that is 2 %

Pls like if logic explained

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