Abnormal Spoilage

DEFINITION of '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, abnormal spoilage is recorded as a separate item: loss from abnormal spoilage.

BREAKING DOWN 'Abnormal Spoilage'

Material spoilage is often discovered during the inspection and quality control process. In job costing, spoilage can be assigned to specific jobs or units, or can be assigned to all jobs associated with production as part of the overall overhead.

RELATED TERMS
  1. Normal Spoilage

    The deterioration of a firm's product line that is generally ...
  2. Abnormal Return

    A term used to describe the returns generated by a given security ...
  3. Significant Order

    An order to buy or sell a security that, due to its abnormally ...
  4. Abend

    An unexpected end to a computer program that results in the system ...
  5. Hindenburg Omen

    A technical indicator named after the famous crash of the German ...
  6. Crossed Market

    A situation arising when the bid price of a security exceeds ...
Related Articles
  1. Managing Wealth

    Trading With Alpha

    Find out more about this abnormal rate of return and how it affects both you and money managers.
  2. ETFs & Mutual Funds

    6 Reasons Hedge Funds Underperform

    Understand the hedge fund industry and why it has grown exponentially since 1995. Learn about the top six reasons why the industry underperforms.
  3. Investing

    Understanding Economic Order Quantity

    Economic order quantity is an inventory-related equation that determines the optimum order quantity that a company should hold in its inventory.
  4. Investing

    How to Analyze a Company's Inventory

    Discover how to analyze a company's inventory by understanding different types of inventory and doing a quantitative and qualitative assessment of inventory.
  5. Investing

    Explaining Carrying Cost of Inventory

    The carrying cost of inventory is the cost a business pays for holding goods in stock.
  6. Markets

    How India Makes Money

    India currently has the ninth largest nominal GDP (and third largest in PPP) in the world.
  7. Markets

    India’s Consumer Inflation Likely Fell in January

    According to a recent poll, India’s consumer inflation is likely to cool off in January driven by a fall in fuel and food prices.
  8. Investing

    What is Involved in Inventory Management?

    Inventory management refers to the theories, functions and management skills involved in controlling an inventory.
  9. Investing

    Understanding Operations Management

    Operations management is concerned with converting materials and labor into goods and services as efficiently as possible to maximize profits.
  10. Markets

    Waste Management Stock To Trade Ex-Dividend (WM)

    Waste Management will send its dividend payment on June 17 to shareholders of record as of June 3.
RELATED FAQS
  1. How can a company control its holding costs?

    Learn about the specific costs that go into a company's overall inventory holding costs, and understand how a company can ... Read Answer >>
  2. Do hedge funds manipulate stock prices?

    Learn how authors of a 2012 study say they found evidence of manipulation of stocks by hedge funds on the last trading day ... Read Answer >>
  3. What does the information ratio tell about the design of a mutual fund?

    Understand what the information ratio is and how to calculate it. Learn what the information ratio reveals about the design ... Read Answer >>
  4. What does a high information ratio tell an investor about a mutual fund?

    Learn what the information ratio is used to measure. Understand what a high information ratio tells an investor about a mutual ... Read Answer >>
  5. What are red flags in a company's days sales of inventory?

    Consider what red flags an investor or lender might be able to determine about a company when examining its days sales of ... Read Answer >>
  6. What are the generally accepted accounting principles for inventory reserves?

    As with most matters related to generally accepted accounting principles (GAAP), accountants assigned with the task of applying ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center