Variable Costing and Absorption Costing Homework Help
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Applying the production costs incurred during the manufacturing of a product is to be applied to the product along with its service. This provides a margin of cost to the manufacturer about profit through that product. These costs can be applied by various methods and variable costing and absorption costing are two of the most important types of such method. In this article for Variable costing and Absorption costing homework Help we discuss the aspects of them.
Absorption Costing Vs Variable Costing
Variable costing is also called as direct costing while the other name for absorption costing is full costing. They both differentiate between the treatments of fixed production overhead costs. In the case of variable costing method, each over head cost is expenses in the period that they have incurred. In the case of absorption costing such over head costs are expensed only after the product has been sold in the market. In this way, our Variable costing and Absorption costing homework Help article states that the variable costing method applies all the variable cost and the manufacturing overhead cost to the finished product.
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Direct Costing System
Also called as marginal costing, in this the cost flows with the product through its inventory sectors until the product is sold in market our Variable costing and Absorption costing homework Help article writers say that this is the usual method that is applied by industries.
Full Costing System
In this case the income statements at the costs of products sold are the major factor to forsee. This is also mentioned in this Variable costing and Absorption costing homework Help article that it is considered as the most precise accounting method to achieve net profitability.
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