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