IAS 2 inventory overhead

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May 13, 2023 at 2:46 pm #684301
trainee1
Participant
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Dear Tutor,
Hope you are fine.

Could you please explain how we should calculate the OH in IAS 2? in example 2 of chapter 10 of FR notes you use the budgeted volume. But what about the overhead expense? We should use the BUDGETED overhead or ACTUAL overhead? In that example you calculate 72.000 / 12.000 . What is 72.000. It is the budgeted OH or ACTUAL OH?

Thanks
May 14, 2023 at 10:10 am #684330
P2-D2
Keymaster
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Hi,

The standard states that we should use the budgeted amount for calculation of the fixed overheads.

Thanks
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