Fixed Overhead in Full Costing

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Absorption Costing > Forum > Fixed Overhead in Full Costing

Fixed Overhead in Full Costing
Frank Forsberg, Student (MBA), Sweden, Member
What does "fixed overhead is a product cost until the products are sold" mean?
 

 
Fixed Overhead in Full Costing System
Michela Arno, Financial Consultant, Netherlands, Member
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.
 

 
What is Fixed Overhead Cost?
john paul, Accountant, Kenya, Member
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