As the cost accountant of Duluth Production Company, you have

been asked by your employer to explain why the unit cost of materials

increases dramatically in the winter. You have discovered that

some of the materials are affected by extremely cold weather and

as a result become unusable during the manufacturing process.

Your employer asks you whether you should treat this loss as a

normal loss or an abnormal loss and how the problem affects costs

per unit manufactured. Provide a brief answer.

LO.1