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What factors would create under absorbed factory overheads & over absorbed factory overheads?
Under absorbed factory overheads: this situation arises if the overheads absorbed are less than the actual overheads.
Following factors would create under absorbed factory overheads:
- Actual overheads being more than the estimated overheads
- Actual output being less than those estimated
Over absorbed factory overheads: this situation arises if the overheads absorbed are more than the actual overheads.
Following factors would create over absorbed factory overheads:
- Actual overheads being less than the estimated overheads
- Actual output being more than the estimated
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