Audit engagement
Overhead absorption & inventory variance probe
Probe of overhead absorption gaps and inventory valuation variances that distort manufacturing cost of sales.
Who this is for
Manufacturers whose overhead rates lag volume changes, or whose inventory variance account has become a monthly catch-all without a clear root cause.
What we do
We rebuild the absorption logic for the review period, compare capacity assumptions to actual machine hours, and sample inventory adjustments that feed manufacturing variances. Stores procedures for returns and cut-offs are observed on site.
Included
- Overhead rate and absorption bridge
- Sample of inventory variance journals with supporting tickets
- Recommendations on rate reset timing and cut-off discipline
Excluded
Full physical inventory observation for statutory audit purposes (we can coordinate with your statutory auditor if needed).
Next step
Commission this audit
Share your costing method, period, and plant layout. We propose a scoped fee within two business days.
Request this engagement