Q143
When the actual overhead is less than the absorbed overhead it is ________.
A.
over absorption
AnswerB.
under absorption
C.
equal absorption
D.
major absorption
Answer: Option A
Solution
Answer: Option A
Solution:
When the actual overhead is less than the absorbed overhead it is over absorption. If the absorbed overheads at predetermined rates are greater than actual overheads, this is known as OVER-ABSORPTION.