EXPLAIN Defectives unit and its treatment. Also EXPLAIN the process of Reclamation of loss from defective units.

Defectives: It signifies those units or portions of production which do not meet the quality standards. Defectives arise due to sub-standard materials, bad-supervision, bad-planning, poor workmanship, inadequate-equipment and careless inspection. The defectives which can be re-made as per the quality standard by using additional materials are known as reworks. Reworks include repairs, reconditioning and refurbishing. Defectives which cannot be brought up to the quality standards are known as rejects. The rejects may either be disposed-off or re-cycled for production process. Treatment of Defectives: Normal - An amount equal to the cost less realisable value on sale of defectives are charged to material cost of good production. Abnormal - Material cost of abnormal defectives are not included in material cost but treated as loss after giving credit to the realisable value of such defectives. The material cost of abnormal loss is transferred to costing profit and loss account. Reclamation of loss from defective units In the case of articles that have been spoiled, it is necessary to take steps to reclaim as much of the loss as possible. For this purpose: (i) All defective units should be sent to a place fixed for the purpose; (ii) These should be dismantled; (iii) Goods and serviceable parts should be separated and taken back into the stock; (iv) Parts which can be made serviceable by further work should be separated and sent to the workshop for the purpose and taken into stock after the defects have been removed; and (v) Parts which cannot be made serviceable should be collected in one place for being melted or sold off. Printed forms should be used to record quantities for all purposes aforementioned.