ACC 1203 – Chapter 3

ADDITIONAL NOTES

For example: In the manufacture RTW apparel, you need a clothing material as its main material used
and there are several kinds of clothing material.

Shrinkage is a kind of spoilage which occurred the production has taken place.

Kung way shrinkage kay maka produce ug 10 RTW

If walay shrinkage, 8 nalang kay ni shrink before production. Thus, there is production waste.

- Opposite of production waste is consumption waste

- Production waste is the waste resulting from the use of material or product
- Example in the hospital, mag inject sa patient. Ang kanang injection kay ikausa ra gamiton –
consumable waste

2 kinds of production place

Normal waste and abnormal waste

For normal waste – shrinkage. Deterioration, evaporation

- The cost of normal waste is absorbed by the cost of the good output.

Cost of abnormal waste

- Is undesirable waste, ang sobra sa normal waste

- Report as period cost recorded; and debit in loss account and credit WIP