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Ovehead absorption.

This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.

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September 18, 2017 at 10:06 am #407851
njivan28
Participant
- Topics: 35
- Replies: 42
Hi Tutor.
i dont understand this,
overheads are covered at $2.50 of every dollar of direct labour.
please help with small example.
September 19, 2017 at 7:00 am #407913
John Moffat
Keymaster
- Topics: 57
- Replies: 54500
If labour is $5 a unit, then overheads will be 5 x 2.50 = $12.50 per unit.
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