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Frank Forsberg, Student (MBA), Sweden
"What does "fixed overhead is a product cost until the products are sold" mean?"
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Fixed Overhead in Full Costing System
Michela Arno, Netherlands
"Hi Frank, it just means that fixed overhead is capitalized into the product, which means it increases the inventory value, until the inventory is sold.
When the product is sold, fixed overhead is expensed and, as a result, it is credited from the balance sheet and debited as expense in the P&L of the period." |
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Summary of Absorption Costing
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Absorption Costing Sponsor
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Special Interest Group Leader
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More on Absorption Costing
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All you need to know about management
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Management Smart Card
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