Overabsorbed Overhead

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Definitions

Overabsorbed Overhead Absorption Costing Absorbed Overhead Favorable Variance Budgeted Profits

In absorption costing, overabsorbed overhead occurs when the absorbed overhead is greater than the incurred overhead costs for a period, representing an addition to the budgeted profits of the organization.

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Definitions

Overhead Total Variance

Overhead Total Variance Standard Costing Fixed Overhead Variable Overhead Overabsorbed Overhead Underabsorbed Overhead

In a system of standard costing, the overhead total variance is the difference between the standard overhead recovered for actual units produced and the actual overhead incurred for a period.