Absorption Drift: The Silent Killer of Accurate Margins
Your overhead allocation was set up correctly once. But volumes change, mix shifts, and the math stops matching reality.
Why Your Profit Margins Might Be Lying to You
Most manufacturers trust their reported margins. But when overhead allocation drifts, standard costs go stale, and inventory variances pile up, those numbers start telling a story that doesn’t match reality.
The most dangerous margin problems aren’t obvious errors. They’re quiet distortions that build over time: overhead that shifts without adjustment, standards set three years ago, inventory counts that “close enough” their way into reports.