How is under absorption and over absorption fitted in cost accounting?
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If overhead is under absorbed,this means that more actual overhead costs
were incurred than expected,with the difference being charged to expense
as incurred.This usually means that the recognition of expense is accelerated into the
current period,so that the amount of profit
recognized declines.
were incurred than expected,with the difference being charged to expense
as incurred.This usually means that the recognition of expense is accelerated into the
current period,so that the amount of profit
recognized declines.
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