Question

What is abnormal effectives?

Hint:

Abnormal effectives = unexpected extra output above normal.

Answer 1

In process costing, a normal loss is expected due to unavoidable reasons like evaporation or wastage during production.
However, sometimes the actual loss is less than the normal loss.
When the actual output is more than the expected normal output, this excess gain is called abnormal effectives.
It means that the process was more efficient than planned, resulting in an extra output.
Abnormal effectives are credited to the Costing Profit and Loss Account because they are considered a gain for the business.
They help managers identify improvements in production efficiency.