direct costing is a technique in which costs are classified as direct cost or indirect cost.
Variable costing is called marginal costing while direct costing is separate concept.
Marginal costing is a technique of costing where the variable expenses are charged to a product. It ignores the fixed expenses incurred by the business in fixing the price of a product on the assumption that the fixed expenses are not incurred in producing an additional unit.They are treated as period costs& charged directly to P& L A/C.Marginal cost is the cost of producing an additional unit of product.It takes the direct expenses & the variable portion of the overhead expenditure. But Direct costing takes into account only the direct expenses like direct mterials, direct labour & direct expenditure for finding out the cost of a product.
Direct cost is cost of product while direct costing is the process which study or accounts the direct cost allocation to products.
False. Activity-based costing is used to allocate indirect cost into direct costs.Regardng direct cost, traditional costing is as appropriate as activity-based costing.
Direct cost is that cost which is directly identifiable with production volume while direct costing is the method or process through which direct cost is allocated to production.
Variable costing is called marginal costing while direct costing is separate concept.
Yes marginal costing is also sometimes called direct costing.
Marginal costing is a technique of costing where the variable expenses are charged to a product. It ignores the fixed expenses incurred by the business in fixing the price of a product on the assumption that the fixed expenses are not incurred in producing an additional unit.They are treated as period costs& charged directly to P& L A/C.Marginal cost is the cost of producing an additional unit of product.It takes the direct expenses & the variable portion of the overhead expenditure. But Direct costing takes into account only the direct expenses like direct mterials, direct labour & direct expenditure for finding out the cost of a product.
It is old costing technique & it is replaced by activity based costing
'''Direct Costing'''
Direct cost is cost of product while direct costing is the process which study or accounts the direct cost allocation to products.
False. Activity-based costing is used to allocate indirect cost into direct costs.Regardng direct cost, traditional costing is as appropriate as activity-based costing.
Direct cost is that cost which is directly identifiable with production volume while direct costing is the method or process through which direct cost is allocated to production.
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.
An absorption costing is an accounting method used to calculate the total cost of a product by factoring in both direct and indirect costs.
when using the technique of direct characterization authors often use
Marginal costing is one of the technique of costing and is usefull for the decision making process. As in decision making process decision are always made for the future activities and not for past activities so if exept marginal costing any other costing method for example absorption costing method is used then there is a chance of making wrong decisions as in future decision making past decision and past data is not relevent for decision making.