Define: Absorbed Overhead

UK Accounting Glossary

Definition: Absorbed Overhead


Quick Summary of Absorbed Overhead


Absorbed overhead is manufacturing overhead that has been applied to products or other cost objects. Overhead is usually applied based on a predetermined overhead allocation rate.




What is the dictionary definition of Absorbed Overhead?

Dictionary Definition


The amount of the overhead of an organisation charged to, or borne by, the production of that organisation for the accounting period under consideration when the technique of absorption costing is used. The absorbed overhead is calculated by multiplying the actual production for the period by the absorption rate.


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Absorbed Overhead. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. November 21, 2019 https://payrollheaven.com/define/absorbed-overhead/.
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Absorbed Overhead. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/absorbed-overhead/ (accessed: November 21, 2019).
American Psychological Association (APA):
Absorbed Overhead. PayrollHeaven.com. Retrieved November 21, 2019, from PayrollHeaven.com website: https://payrollheaven.com/define/absorbed-overhead/

Definition Sources


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This glossary post was last updated: 27th January 2019.