About the overheads recovery

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ranjan (Querist)
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12 November 2011 why is fixed OH recovered on the basis of normal capacity when actual production is less than or equal to normal production and recovered on actual production basis when actual production is more than normal capacity? and what actually is fixed production and overhead recovery means ? please

Kishanlal Paliwal

Kishanlal Paliwal (Expert)
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14 November 2011 Fixed overheads charged on irrespective of production capacity since these are not governed/monitored by the production capicity.

Absorption of Fixed overheads w.r.t. actual production, which governs by break even point.

Hope, it is cleared to you.

Regards
K.L.Paliwal