Absorption costing, Financial Accounting

Assignment Help:

 

It is a managerial accounting cost method of expensing all costs related with producing a particular product. Absorption costing utilizes the total direct costs and overhead costs related with manufacturing a product as the cost base. Generally accepted accounting principles (GAAP) need absorption costing for outside reporting. Absorption costing is also refer to as "full absorption costing".

Some of the direct costs related with producing a product involve wages for workers actually manufacturing a product, the raw materials used in manufacturing a product, and all the overhead costs, like all utility costs, utilized in manufacturing a good. 

Absorption costing involves anything that is a direct cost in manufacturing a good as the cost base. This is distinct with variable costing because in variable costing fixed manufacturing costs are not absorbed by the manufactured goods. Advocates encourage absorption costing as fixed manufacturing costs give future benefits.

 

 

 


Related Discussions:- Absorption costing

Capita expenditure and revenue expenditure, The company selected a suitable...

The company selected a suitable site and commissioned a survey and valuation report, for which the fee was £1,500. On the basis of the report the site was acquired for £90,000. Sol

Assessing project risk, In assessing project risk it is significant to be c...

In assessing project risk it is significant to be clear about the meaning of risk. From an academic perspective risk demotes to a set of circumstances regarding a given decision wh

Calculate the operating cash flow, You are evaluating a project which costs...

You are evaluating a project which costs $720,000, has a four-year life, and no salvage value. Depreciation is straight-line and the half year rule does not apply. Sales are projec

Adjusting Entries, The following accounts and balances have been taken from...

The following accounts and balances have been taken from the general ledger trial balance of Daiton Repairs Limited as at October 31, 19×2, after its first year of operation. Adjus

Calculation of liquidity ratios current ratio and acid-test, Calculation of...

Calculation of Liquidity ratios Current Ratio and Acid-Test Ratio -               2008 2009 2010 A

Probability of success in application for debt finance, Q. Probability of S...

Q. Probability of Success in Application for Debt Finance? I have to advise you that there are signs of overtrading in our recent financial statements and our company is approa

Draw budget constraint - budget line, You will gain welfare from consuming ...

You will gain welfare from consuming bread and chocolate. Your welfare is described numerically by W = 4B + 2C, where B denotes the quantity of bread you choose to consume, and C d

Investments under the trustee act-trust laws and accounts, Investments unde...

Investments under the Trustee Act The act defines the categories of investment as follows:         1. Fixed interest securities are: Securities which under their te

Earn profit or incurred loss , Assure  you have just  started a Mobile sto...

Assure  you have just  started a Mobile store. You sell mobile sets and  currencies of Airtel, Vodaphone, Reliance and BSNL.  Take five transactions  and prepare a position stateme

Conversion of members'' to creditors'' winding up-liquidation, Conversion o...

Conversion of members' to creditors' winding up If the liquidator in a members' winding up forms the opinion that the company will not be able to pay its debts in full within t

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd