What
are Scrap, Defectives and Spoilage?
Scrap: -Scrap is the residual outcome
from a production process which generally has disposable value.
Defectives: -Defectives are part of a
production process. Defectives can be rectified by occurring some additional
costs. Defective works occurs because of many reasons like inefficiency of
workers, poor quality of raw materials, production planning problems etc.
Defectives products can be rectified by using additional material, labor and
overhead and can be sold as good output.
Spoilage: -Spoilage occurs when goods are
damaged in a way that there is no chance for rectification. Spoilage is
disposed off without any further rectification.
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