Unabsorbed fixed overhead costs in an absorption costing system are
A)fixed manufacturing costs not allocated to units produced.
B)variable overhead costs not allocated to units produced.
C)excess variable overhead costs.
D)costs that cannot be controlled.

Question

Quizplus · Accepted Answer

Unabsorbed fixed overhead costs are fixed manufacturing costs not allocated to units produced. In an absorption costing system, fixed overhead costs must be allocated to units produced as part of the cost of goods sold. If there are any remaining fixed overhead costs that cannot be allocated to units produced, they are considered unabsorbed.

Unabsorbed Fixed Overhead Costs in an Absorption Costing System Are