Absorption of OverheadsForums › FIA Forums › MA2 Managing Costs and Finance Forums › Absorption of OverheadsThis topic has 1 reply, 2 voices, and was last updated 3 years ago by Ken Garrett.Viewing 2 posts - 1 through 2 (of 2 total)AuthorPosts August 3, 2021 at 5:28 am #630203 maximus07ParticipantTopics: 446Replies: 437☆☆☆☆Overhead absorption rate is taken in percentages of prime cost. So if I am given prime cost per unit. What will I do in denominator? I mean that I will multiply prime cost per unit with budgeted sales units or with budgeted production units? August 3, 2021 at 2:32 pm #630267 Ken GarrettKeymasterTopics: 10Replies: 10533☆☆☆☆☆Denominator = budgeted output ie budgeted production.Production overheads are absorbed as units are made, not as they are sold.AuthorPostsViewing 2 posts - 1 through 2 (of 2 total)The topic ‘Absorption of Overheads’ is closed to new replies.