50 units are processed at a cost of Rs 80, normal loss is 10%, each unit carries a scrap value of 25 paise If output is 40 units, the value of abnormal loss will be _________.

The correct answer is C. Rs. 8.75.

Normal loss is the loss that is expected to occur in the normal course of business. It is usually expressed as a percentage of the output. In this case, the normal loss is 10%, which means that 5 units are expected to be lost.

Abnormal loss is the loss that is not expected to occur in the normal course of business. It is usually caused by some unforeseen event, such as a machine breakdown or a power outage. In this case, the abnormal loss is 10 units.

The value of the abnormal loss is calculated as follows:

Abnormal loss = (Output – Normal loss) x Unit cost

= (40 – 5) x Rs. 80

= Rs. 8.75

The other options are incorrect because they do not take into account the normal loss.