Underabsorbed Overhead

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Definitions

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.

Definitions

Underabsorbed Overhead

Underabsorbed Overhead Absorption Costing Overhead Costs Adverse Variance Budgeted Profits Cost Accounting

In absorption costing, the circumstance in which the absorbed overhead is less than the overhead costs incurred for a period. This adverse variance represents a reduction of the budgeted profits of the organization.