When the actual overhead is less than the absorbed overhead it is ________.

The correct answer is B. under absorption.

Overhead absorption is the process of allocating overhead costs to products or services. When actual overhead is less than the absorbed overhead, it is called under absorption. This can happen when production is lower than expected, or when overhead costs are higher than expected. Under absorption can lead to a decrease in net income, as the company will have to record the difference as an expense.

Over absorption is the opposite of under absorption. It occurs when actual overhead is more than the absorbed overhead. This can happen when production is higher than

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