overhead absorption rate
- Fina means of attributing overhead to a product or service, based for example on direct labor hours, direct labor cost, or machine hours. The choice of overhead absorption base may be made with the objective of obtaining “accurate” product costs, or of influencing managerial behavior, for example, overhead applied to labor hours or part numbers appears to make the use of these resources more costly, thus discouraging their use.
The ultimate business dictionary. 2015.
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overhead absorption rate — UK US noun [C] ► ACCOUNTING ABSORPTION RATE(Cf. ↑absorption rate) … Financial and business terms
overhead absorption rate — See: absorption rate … Accounting dictionary
fixed overhead absorption rate — The budgeted fixed overheads divided by the budgeted standard hours, budgeted production in units, or other budgeted production measure. See: absorption rate … Accounting dictionary
absorption rate — overhead absorption rate; = recovery rate The rate or rates calculated in an absorption costing system in advance of an accounting period for the purpose of charging the overheads to the production of that period. Absorption rates are calculated… … Accounting dictionary
absorption rate — overhead absorption rate; recovery rate The rate or rates calculated in an absorption costing system in advance of an accounting period for the purpose of charging the overheads to the production of that period. Absorption rates are calculated… … Big dictionary of business and management
absorption rate — ➔ rate1 * * * absorption rate UK US noun [C] ► (also overhead absorption rate, also recovery rate) ACCOUNTING the percentage of fixed costs (= costs that are the same each month) that a company pays for with the profits from particular products… … Financial and business terms
absorption rate — Fin see overhead absorption rate … The ultimate business dictionary
absorption rate — /əb zɔ:pʃən reɪt/ noun a rate at which overhead costs are absorbed into each unit of production … Dictionary of banking and finance
overhead efficiency variance — overhead productivity variance; = productivity variance In a standard costing system, that part of the overhead total variance that arises from the more or less efficient use of the time available to carry out the actual production. It compares… … Accounting dictionary
overhead cost absorbed — overhead cost recovered The actual production for a period multiplied by the overhead absorption rate budgeted for that period … Accounting dictionary