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Explain the implications of absorption and variable costing

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Reference no: EM132593172

Explain the implications of absorption and variable costing on net income, product cost and cost volume profit analysis.  The absorption of fixed overhead costs as part of the cost of inventory on the balance sheet presents ethical challenges.  In what way?  What conditions are likely to exist when operating managers are compensated based on accounting earnings and accelerated depreciation methods are used to compute overhead charges to operating departments?  How do depreciation methods affect product cost?

Absorption or variable costing.  Which would recommend to a company in a service industry.  Why? 

Reference no: EM132593172

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