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Preparing Financial Statements of NPO-II

is the amount...

Question

_________ is the amount by which the absorbed overheads fall short of the actual amount of overheads incurred.

A

Over absorption of overheads

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B

Under absorption of overheads

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C

Overheads absorption

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D

None of these

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Solution

The correct option is B Under absorption of overheads
If overheads is under absorbed that means more actual overheads cost were incurred than the expected overheads. The difference being charged to expense account

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