UNDERABSORBED OVERHEAD Definition

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UNDERABSORBED OVERHEAD is where total overhead has not been fully allocated to products sold or services offered. Such a condition can result in an understatement of COGS or cost of sales.

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OPERATING EXPENSES is all selling and general & administrative expenses. Includes depreciation, but not interest expense.

DIVIDEND RECEIVED DEDUCTION is the reduction of dividend income from the taxable income of the investing corporation, as provided in section 301 of the Internal Revenue Code. Currently, 70% of dividends received from nonaffiliated corporations may be excluded from taxable income.

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