Accounting treatment of under-absorbed overheads is very easy to understand. We just debited this amount to costing profit and loss account as loss, if it happened due to defective planning or default of management. But if it is happened due to increase the prices in market, then it will be charged on unit produced and cost of sale. In our solved example, we show accounting treatment of under-absorbed overheads with following way :
AUTHOR:
Vinod Kumar ( Educator )
Vinod Kumar (born March 30, 1980) is an Indian Educator who is founder of SvTuition and Accounting Education a free online accounting education platform and an organisation with which he has written over 5000+ contents and video teaching lessons a wide subjects, focusing on accounting, finance, mathematics and science. Read more at https://www.svtuition.org/p/vinod-kumar.html
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