Absorbed overhead (also known as applied overhead or recovered overhead) refers to the amount of overhead costs allocated to a specific production process or cost unit within an organization during an accounting period, using the technique of absorption costing.
Absorption rate, also known as overhead absorption rate or recovery rate, is a crucial concept in absorption costing systems used to allocate overhead costs to production. This detailed guide covers the calculation methods, usage, and comparisons with modern costing systems.
A production overhead absorption rate used uniformly across a factory, often serving as an alternative to calculating a rate for each individual cost centre.
Overhead Efficiency Variance is an accounting concept used in standard costing systems to measure the variance in overhead costs due to the efficiency or inefficiency of actual production time compared to the standard time allocated.
A predetermined overhead rate is an estimated rate used to allocate overhead costs to products or job orders before actual costs are known. This rate is usually computed in advance of operations and often covers a fiscal year.
The rent-up period refers to the timeframe between the completion of construction and the point at which a newly constructed property becomes fully occupied.
Standard variable overhead cost refers to a specific type of standard cost derived from the standard time allowed for an operation or product production and the standard variable overhead absorption rate per unit time for that operation or product.
Vacancy rate is a key metric used in real estate to measure the percentage of all units or space that is unoccupied or not rented. It is essential for estimating potential income and making informed investment decisions.
Understand the key concept of variable overhead efficiency variance within a standard costing system, and how it affects business financial performance.
