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    Question

    400 units were introduced in a process in which 40 units

    is the normal loss. If the actual output is 300 units, then there is:
    A No abnormal loss Correct Answer Incorrect Answer
    B No abnormal gain Correct Answer Incorrect Answer
    C Abnormal loss of 60 units Correct Answer Incorrect Answer
    D Abnormal gain of 60 units Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    To find out if there's any abnormal loss or gain, we compare the actual output with the expected output (excluding normal loss). Expected output (excluding normal loss) = Total units introduced - Normal loss Expected output = 400 units - 40 units = 360 units Actual output is given as 300 units. Since the actual output (300 units) is less than the expected output (360 units), there is a shortfall of 60 units. This shortfall of 60 units represents abnormal loss because it is beyond the normal loss of 40 units.

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