Variable and Absorption Costing Reconciliation Homework Help
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The sole goal of a company is to achieve maximum profit in less time and increase the value of the company. Value can be added by the excessive generation of revenue. Variable costing and absorption costing ate two methods that help in generation of high revenue. Reconciliation is defined in our Variable and Absorption Costing Reconciliation homework Help article to define the relationship between both of them.
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Absorption Costing Vs Variable Costing
To understand the cost products, usually there are two cost accumulation methods. They are listed below in this Variable and Absorption Costing Reconciliation homework Help article
1. Absorption cost, also known as full costing is in which all the costs including, direct labor, direct material and manufacturing overheads are specified as product costs. This is usually adopted while making financial statements by matching the expenses against the revenues in the same revenue earned period. In some cases, as our Variable and Absorption Costing Reconciliation homework Help writers say, fixed costs are treated as period costs and are expenses in the time span that they have incurred.
2. Variable costing, that is usually not acceptable by the GAAP, but very useful for management in decision making is a cost method that helps in prediction of cost. In this the manufacturing overhead costs are treated in a little different way than that in absorption costing. Here all non product costs are concerned as period costs. In this Variable and Absorption Costing Reconciliation homework help article the costs are usually mentioned based on their product Vs period function.
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