Over/under Absorption

Merioneth Settling In NicelyRegistered Posts: 21

This might sound really thick but I'm trying to do my course work and I'm stuck.

I have complated the table and appropriated over head costs to the relevant departments for the year based on batches of t shirts processed.

They then give you figures for one department for one month and ask whether it was over or under absorped.

I cannot think what to do next!



  • SandyHood
    SandyHood Font Of All Knowledge Registered, Moderator Posts: 2,034
    Was the total hours worked x the OAR greater than the actual overhead cost incurred?
    If so that is the amount OVERABSORBED

    If it is the other way round, that is the amount UNDERABSORBED
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