## Absorption Costing: Over and Under-absorption

By |2022-09-15T12:30:39+02:00August 10th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Over and Under-absorption

• As has been said before overhead absorption rates are calculated in advance
• The formula for getting an overhead absorption rate is:
• \text{OAR=}\dfrac{\text{Budgeted Production Overhead}}{\text{Budgeted Level of Activity}}
• The budgeted level of activity can be units,labour hours, machine hours etc
• It is […]

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## Absorption of Overheads: Solution to Reapportionment of service costs question

By |2022-09-15T12:30:40+02:00August 10th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Reapportionment of service costs where there is interwork

• This is a solution to the question found here
• First we will use the repeated distribution method to redistribute service costs
• Lastly we will use the algebraic method to reapportion costs
• We have already looked at why […]

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## Absorption of Overheads: Reapportionment of service costs where there is interwork

By |2022-09-15T12:30:41+02:00August 10th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Reapportionment of service costs where there is interwork

• We have already looked at the need for reapportioning the portion of overheads that would have been allocated and apportioned to service cost centres
• We also looked a simple example where there was no inter work among departments […]

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## Absorption of Overheads: Reapportionment of service costs with no interwork

By |2022-09-15T12:30:42+02:00August 8th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Reapportionment of service costs no interwork

• In the the example found here we looked at how to allocate and apportion overheads using bases and an overhead analysis sheet
• We have already looks at the theory of overhead absorption here
• We have also looked at

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By |2022-09-15T12:30:43+02:00August 8th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption of Overheads: Overhead Analysis Sheet Example

• In this example we will look at how you can use an overhead analysis sheet to allocate and apportion overhead costs
• It is important to note that while the format shown below is the most popular
• It is entirely […]

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## Absorption of Overheads: More than one department and more than one product example

By |2022-09-15T12:30:44+02:00August 8th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption of Overheads: More than one department and more than one department worked example

• We have already looks at the theory of overhead absorption here
• We have also looked at allocation and apportionment here
• We have also looked at the theory of how to […]

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## Absorption of Overheads: More than one product one department worked example

By |2022-09-15T12:30:44+02:00August 7th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption of Overheads: More than one product one department worked example

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## Absorption of Overheads: One Product Worked Example

By |2022-09-15T12:30:45+02:00August 7th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption of Overheads: One Product Worked Example

• We have already looks at the theory of overhead absorption here
• We have also looked at the theory of how to calculate overhead absorption rates (OARs) and why
• Now we will look at a scenario where a […]

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## Overhead apportionment, allocation and allotment

By |2022-09-15T12:30:45+02:00August 7th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Overhead apportionment, allocation and allotment

• As already pointed out here at the first step of absorption costing  involves the processes of:
1. Allocation
2. Allotment and
3. Apportionment
• In very simple cases where there is only product none of this is necessary as overheads can be easily […]

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## Overhead absorption and absorption rates (OAR)

By |2022-09-15T12:30:46+02:00August 7th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption Costing:  Overhead Absorption Rates (OAR)

• As already pointed out elsewhere production overheads are usually calculated at the beginning of the accounting period
• This would allow, for example, the business to determine how much cost to assign to a unit before calculating the selling price
• […]

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