Definition: Spoilage is the cost accounting concept of waste that is produced during a job. Spoilage is a normal occurrence in all manufacturing. Think of it like scrap. There will always be scrap metal or materials left over after a product is manufactured. In other words, spoilage is not only normal; it is unavoidable.
What Does Abnormal Spoilage Mean?
Abnormal spoilage, on the other hand, refers to waste that could have been avoided. When manufacturing processes go wrong or materials have defects, an abnormal about of waste or spoilage is produced. The abnormal spoilage could have been avoided if the job or process went according to plan.
Example
Let’s take a look at an example. For instance, assume an ice cream company is in the middle of mixing up a 10,000,000,000-gallon vat of ice cream and the mixer breaks down. All of the ice cream in process will be ruined or wasted. This spoilage could have been avoided if the machine didn’t break down. Another example of abnormal spoilage is errors. If the chemist mixed in too many cookie dough chunks into the ice cream mix, the batch could also be ruined.
The concept of abnormal spoilage reinforces the idea that management should maintain equipment and train/supervise personnel. The first example could have been avoided if the ice cream machines were maintained properly. The second example could have been avoided if proper supervision was given to the people mixing in the cookie dough. Often times what management saves in avoiding maintenance and training expenses, they lose in abnormal spoilage.
