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Abnormal gain

An abnormal gain occurs when actual process loss is less than the normal allowance, so actual good output exceeds expected good output. It is the favourable quantity difference from the process standard, not a general unexpected business gain. Account for it consistently with the normal-loss and scrap assumptions rather than treating it as extra sales revenue. The process cost per expected good unit is determined using the normal output basis in a simple calculation.

Worked example

Input 1,000 units has a normal loss of 50, but actual output is 970. Actual loss is 30, giving an abnormal gain of 20 units relative to expected output of 950.

Common mistake

An abnormal gain can arise from process performance within management’s influence. Do not define it as automatically uncontrollable or as a fair-value gain.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA MA Direct September 2026–June 2027
FIA FMA Direct September 2026–June 2027