Cost Accounting
This query is : Resolved
Ramachandran K
(Querist)
19 July 2010
Hi,
Can somebody explain the deferral of overhead in the case of Under/Over absorption with illustrations?
Also with some accounting journals.
Thanks & Kind Regards,
Ramachandran K
Can somebody explain the deferral of overhead in the case of Under/Over absorption with illustrations?
Also with some accounting journals.
Thanks & Kind Regards,
Ramachandran K
20 July 2010
under absorption costing Fixed costs are charged or accounted to products as per budgeted cost & production.
i.e. Budgeted Fixed Costs / Budgeted units
when the actual production is not equal to budgeted, the fixed cost charged to products is less or more than actually incurred. this difference is called under/over absorption.
i.e. Budgeted Fixed Costs / Budgeted units
when the actual production is not equal to budgeted, the fixed cost charged to products is less or more than actually incurred. this difference is called under/over absorption.
CMA Ramesh Krishnan
(Expert)
01 August 2010
Under absorpiton is the actual overhead is less than the pre determined rate of OHS
Over absorpiton is the actual overhead is more than the pre determined rate of OHS
Over absorpiton is the actual overhead is more than the pre determined rate of OHS
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