What effect does under or over apsorption of production overheads have on profit?
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Apsorption Costing
6y ago#1If we under absorb then we have not charged enough and so the profit is too high. If we over absorb then we have charged too much and so the profit is too low.
This is all explained in my free lectures on absorption costing. The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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