Fixed administration overheads ,fixed selling overheads absorb on normal capacity of production units same as fixed manufacturing overheads ..am i right?
2 Replies
shilpi
(student)
(780 Points)
Replied 15 June 2021
if above statement is right ,then why we consider only fixed manufacturing overhead (on normal capacity basis and fixed administration , fixed selling overheads on actual capacity in absorption costing method?
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 15 June 2021
For absorption costing all fixed variable overheads are absorbed including the above.
In case of COGS or COS or Inventory valuation, WIP formula separates selling and distribution overheads.
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