OVERHEAD ABSORPTION Definition

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OVERHEAD ABSORPTION is the term used for describing the transfer of value from a fixed asset such as a building or machine to the final product. In this way the indirect costs of the entity can be assigned to the products or services supplied.

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3% RULE see THREE PERCENT RULE.

NORMAL BALANCE, in accounting, is the side of an account, whether debit or credit, to which increases to the account are recorded.

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