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shilpi (student)     15 June 2021

Fixed overheads

Fixed administration overheads ,fixed selling overheads absorb on normal capacity of production units same as  fixed manufacturing overheads i right?

 2 Replies


shilpi (student)     15 June 2021

if above statement is right ,then why we consider only fixed manufacturing overhead (on normal capacity  basis and fixed administration , fixed selling overheads on actual capacity in absorption costing method?

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     15 June 2021

For absorption costing all fixed variable overheads are absorbed including the above. 

In case of COGS or COS or Inventory valuation, WIP formula separates selling and distribution overheads. 

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