Normal Spoilage


Normal Spoilage
The deterioration of a firm's product line that is generally considered to be unavoidable and expected. Normal spoilage refers to the inherent worsening of products during the production or inventory processes of the sales cycle. Companies typically set a normal spoilage rate for lines of products which they produce and assign the costs of such spoilage to cost of goods sold.

Companies operating in any sort of manufacturing environment will inevitably see at least part of their production line wasted or destroyed during manufacturing, transporting or while in inventory. Consequently, firms will use historical data along with some forecasting methods to produce a number or rate of normal spoilage to account for such losses, typically as a portion of cost of goods sold.


Investment dictionary. . 2012.

Look at other dictionaries:

  • normal spoilage — Unavoidable waste, *scrap, and defective goods arising from manufacturing processes. Unlike *abnormal spoilage, normal *spoilage is considered to be inherent in a *production process. It is generally viewed as uncontrollable in the short run, as… …   Auditor's dictionary

  • Нормальный брак (NORMAL SPOILAGE)  — Затраты, понесенные в результате брака, которые невозможно ликвидировать повышением производительности; такие затраты необходимо относить на объект учета затрат в качестве элементов производственной себестоимости …   Словарь терминов по управленческому учету

  • spoilage — *Waste, scrap, and defective goods arising from manufacturing processes. Spoilage is not necessarily without value, as the waste, *by products, or defective *output of a *production process can sometimes be sold for *scrap value or reworked. A… …   Auditor's dictionary

  • normal loss — The loss arising from a manufacturing or chemical process through waste, seepage, shrinkage, or spoilage that can be expected, on the basis of historical studies, to be part of that process. It may be expressed as a weight or volume or in other… …   Accounting dictionary

  • normal loss — The loss arising from a manufacturing or chemical process through waste, seepage, shrinkage, or spoilage that can be expected, on the basis of historical studies, to be part of that process. It may be expressed as a weight or volume or in other… …   Big dictionary of business and management

  • abnormal spoilage — Avoidable waste, scrap, and defective goods arising from manufacturing processes. In contrast to *normal spoilage, abnormal *spoilage is not considered to be an inherent part of a manufacturing process, and it tends to be expensed as incurred …   Auditor's dictionary

  • Abnormal Spoilage — The waste or wrecking of inventory beyond what is expected in normal business processes. Abnormal spoilage can be the result of broken machinery or from inefficient operations, and is considered to be at least partially preventable. In accounting …   Investment dictionary

  • нормальный брак — Затраты, понесенные в результате брака, которые невозможно ликвидировать повышением производительности; такие затраты необходимо относить на объект учета затрат в качестве элементов производственной себестоимости.… …   Справочник технического переводчика

  • waste — spoilage The amount of material lost as part of a production process. Acceptable levels of waste, known as a normal loss, are part of the cost of production and as such are allowed for in the product costs. See also: abnormal loss, process… …   Accounting dictionary

  • waste — spoilage The amount of material lost as part of a production process. Acceptable levels of waste, known as a normal loss, are part of the cost of production and as such are allowed for in the product costs. See also process costing …   Big dictionary of business and management


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