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A company using absorption costing.its OAR is 12.
normal activity level 10000,actual production units 11500.fixed cost are as budgeted.invntory level for 1999 yr were 400 and closing and at the end of the year were 600.
what was the actual under or over absorption?
in the answer it takes the budgeted fixed overheard=the actual fixed overhead. but I dint get it why this two is same here and how?
while calculating I calculate the absorbed amount (11500*12).but I cant understand how the actual fixed overheads are equal of budgeted fixed overheads ?thanx in advance sir.
ohh now i got it. as in the question they have told that actual fixed overheads is equal of budgeted thats y they r same. so i have to go through with question.
thanx a lot sir.
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