In Activity based costing all overheads are charged to function or department based on activities they perform while in absorption based accounting, overheads are apportioned using some kind of base rate like labor hours or machine hours etc.
Target costing is when you have a goal for the project and its costs. Absorption costing is when you need to fix the excess spending.
difference between conventional costing methodology ang activity costing
An activity-based absorption costing system defines the cost by how many activities a product unit uses. A traditional absorption costing system defines the cost by how much money went into making the product unit.
Under absorption costing overheads are allocated to production based on predetermined overhead rates like machine hours, or direct labor hours etc while in direct costing overheads are allocated based on activity performed and relationship with production units.
marginal costing is recommended by IAS and absorption costing is not recommended by IAS,marginal costing is used for internal purposes and absorption costing is ysed for external purposes,in marginal costing the fixed production overheads are not calculated as a product cost and in absorption costing the fixed prodution overheads are calculated as product cost.
Target costing is when you have a goal for the project and its costs. Absorption costing is when you need to fix the excess spending.
difference between conventional costing methodology ang activity costing
An activity-based absorption costing system defines the cost by how many activities a product unit uses. A traditional absorption costing system defines the cost by how much money went into making the product unit.
there is have some differeance . 1.
Under absorption costing overheads are allocated to production based on predetermined overhead rates like machine hours, or direct labor hours etc while in direct costing overheads are allocated based on activity performed and relationship with production units.
It is old costing technique & it is replaced by activity based costing
marginal costing is recommended by IAS and absorption costing is not recommended by IAS,marginal costing is used for internal purposes and absorption costing is ysed for external purposes,in marginal costing the fixed production overheads are not calculated as a product cost and in absorption costing the fixed prodution overheads are calculated as product cost.
activity based costing does not promote TQM(total quality management) and continuous improvement but attribute based costing promotes the both.
difference between cost and costing
As far as I know there is only an overhead absorption rate and a full absorption rate. The alternative being marginal costing. There are 3 methods of absorption costing. These being Activity, Time and Efficiency but I'm not sure what you are asking exactly.
full absorption costing
The difference between marginal and absorption costing is that when preparing a statement based on marginal costing, you would subtract all variable costs, production or otherwise, from the sales revenue, to give the contribution, from which you subtract all fixed costs (production and non-production) to give profit made.Using absorption costing however, you subtract production costs (this will include both variable and fixed production costs) only from sales to give you the gross profit, from which you then subtract all non-production costs (fixed or variable) to give net profit.The final profit using both methods is always the same.