Treatment of Under/ (Over) Absorption of Overheads | CA Inter | Costing Capsules (Nov, 2023)

This intensive CA Inter costing revision lecture is designed to swiftly revise the entire Costing/Cost and Management Accounting subject. Similar to a Costing Marathon, this video series covers essential concept discussions that you should watch daily until your CA Intermediate costing exam.
Join our CA Inter Costing Marathon and conquer your exam preparation with confidence! As the CA Intermediate exams draw near, the pressure to remember critical concepts increases. Our Costing Capsules are here to help you retain those important points and concepts, enabling you to solve sums effectively during your examination.
To enhance your learning experience, download our App today and enjoy a range of benefits including a personal coach, a dedicated doubt clearing space, personalized test analysis, study booster sessions, free preparatory study material, updates from ICAI (Institute of Chartered Accountants of India), tips and strategies, result updates, revision marathons, and more. Our live online classes ensure an interactive learning environment, and you'll have access to past year question papers to further strengthen your understanding. Stay informed with important ICAI announcements through our platform.
In addition, we delve into the concept of Overhead Under Absorption and Over Absorption. Learn how companies using standard costing determine the expected overhead cost to be incurred in an accounting period and apply it to cost objects. Discover what happens when the actual overhead amount differs from the standard amount, resulting in either under absorption or over absorption. We explore the implications of these scenarios, including accelerated expense recognition and its impact on profit.
🔗 Understanding the Basics:
Under Absorption and Over Absorption of Overheads can significantly impact financial reporting. Join us as we explore the reasons behind these variations and uncover effective strategies for their treatment.
🔍 Key Learning Points:
Identifying Under Absorption: Recognize when actual overhead costs exceed absorbed overheads and its implications.
Addressing Over Absorption: Understand what happens when absorbed overheads exceed actual overhead costs and how to handle the surplus.
🔄 Strategies for Treatment:
We'll delve into practical approaches to rectify under or over absorption, ensuring accurate cost representation for decision-making and financial analysis.
🤔 Why Does It Matter for CA Intermediary Exams?
Mastery of this topic is essential for aspiring CAs, as it not only demonstrates your understanding of costing principles but also your ability to make informed financial adjustments.
🔑 Key Learning Objectives:
Grasp the reasons behind under and over absorption of overheads.
Learn effective strategies to address and rectify these variations.
Understand the impact of under/(over) absorption on financial statements and decision-making.
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ok wow these capsules are amazing (altho i have watched 2 so far), I was attending the lectures provided by the icai and it was so confusing to understand.
Thank god I came across this channel and the part that I was struggling with the most has become crystal clear now:)