Manufacturing Cost Accounting & Finance worked example

Scrap Accounting Cost at 61% net loss share: a worked example

This worked example runs the scrap accounting cost numbers for a tougher week than the baseline: 61% net loss share instead of the typical 85%. Estimates the booked scrap loss after salvage recovery and disposal handling.

The inputs for this scenario

  • Scrapped units: 1,200 units (held at the documented default)
  • Standard cost per unit: 18 $ / unit (held at the documented default)
  • Net loss share: 61 % (the input this scenario stresses; the baseline uses 85)
  • Disposal and handling fee: 600 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Scrap cost = scrapped units x standard cost x net loss share% + disposal fee.
  • Total scrap accounting cost works out to 13,776 $ at these inputs, and this is the headline figure for the scenario.
  • Scrap accounting cost per unit works out to 11.48 $ / piece at these inputs.
  • Variable scrap accounting cost works out to 13,176 $ at these inputs.
  • Fixed scrap accounting cost adder works out to 600 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where net loss share sits at 85% and the headline result is 18,960 $, this scenario comes in 27.34% below the baseline at 13,776 $.
  • Use it when valuing scrap for cost-of-quality reporting, building a scrap-reduction business case, or reconciling scrap variances at period close. A result at this level usually justifies acting on the stressed input before touching anything else, because every other figure in the table is downstream of it.

Results at a glance

  • Total scrap accounting cost: 13,776 $ (headline result)
  • Scrap accounting cost per unit: 11.48 $ / piece
  • Variable scrap accounting cost: 13,176 $
  • Fixed scrap accounting cost adder: 600 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Scrap Accounting Cost calculator, set net loss share to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.