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What costing method considers variable factory overhead a product cost?
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∙ 11y ago
variable costing
Wiki User
∙ 11y ago
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Difference between marginal cost accounting statements and absorption cost accounting statement?
marginal costing considers only direct) materials,labour,expenses and variable factory overheads excluding fixed factory overheads but absorption considers (direct) materials ,labour,expenses,variable and fixed factory overheads.
The difference between variable factory overhead incurred and total standard variable factory overhead based on the actual quantity of the cost driver for applying the overhead is the?
cheatFAIL
What is absorption costing?
The Absorption Cost all manufacturing costs; this includes: - direct materials (those materials that become an integral part of a finished product and can be conveniently traced into it) - direct labor (those factory labor costs that can be easily traced to individual units of product. Also called touch labor) - both variable and fixed manufacturing overhead in the cost of a unit of product. As a result, under absorption costing, fixed overhead is a product cost until sold.
Factory overhead should be allocated on the basis of?
factory overhead should be allocated on basis of their apportiomen
What is factory Overhead applied?
what isfactory overhead applied
When the variable costing method is used how does fixed factory overhead appear on the income statement?
fixed expense
Difference between marginal cost accounting statements and absorption cost accounting statement?
marginal costing considers only direct) materials,labour,expenses and variable factory overheads excluding fixed factory overheads but absorption considers (direct) materials ,labour,expenses,variable and fixed factory overheads.
The difference between variable factory overhead incurred and total standard variable factory overhead based on the actual quantity of the cost driver for applying the overhead is the?
cheatFAIL
What is variable costing method?
method in which the costs to be inventoriedinclude only the variablemanufacturing costs. Fixed factory overhead is treated as a period cost-it is deducted along with the selling and administrative expenses in the period incurred. That is, Direct materials $xx Direct labor xx Variable factory overhead xx Product cost $xx Fixed factory overhead is treated as a period expense. Variable costing is used for internal management only. Its uses include: (1) inventory valuation and income determination; (2) relevant cost analysis; (3) break-even analysis and Cost-Volume-Profit (CVP) Analysis ; and (4) short-term decision-making. Variable costing is, however, not acceptable for external reporting or income tax reporting. Companies that use variable costing for internal reporting must convert to absorption costing for external reporting. Under absorption costing, the cost to be inventoried includes all manufacturing costs, both variable and fixed. Nonmanufacturing (operating) expenses, i.e., selling and administrative expenses, are treated as period expenses and thus are charged against the current revenue. Direct materials $xx Direct labor xx Variable factory overhead xx Fixed factory overhead xx Product cost $xx Two important facts are noted: 1. Effects of the two costing methods on net income: (a) When production exceeds sales, a larger net income will be reported under absorption costing. (b) When sales exceed production, a arger net income will be reported under direct costing. (c) When sales and production are equal, net income will be the same under both methods. 2. Reconciliation of the direct and absorption costing net income figures: (a) The difference in net income can be reconciled as follows: (b) the above formula works only if the fixed overhead rate per unit does not change between the periods.
What is absorption costing?
The Absorption Cost all manufacturing costs; this includes: - direct materials (those materials that become an integral part of a finished product and can be conveniently traced into it) - direct labor (those factory labor costs that can be easily traced to individual units of product. Also called touch labor) - both variable and fixed manufacturing overhead in the cost of a unit of product. As a result, under absorption costing, fixed overhead is a product cost until sold.
Factory overhead should be allocated on the basis of?
factory overhead should be allocated on basis of their apportiomen
What is factory Overhead applied?
what isfactory overhead applied
What is Applied manufacturing overhead?
what is factory overhead applied?
Is salary of factory manager a period cost?
Salary of factory manager is Manufacturing overhead. and Manufacturing overhead is Product costs. So, It's not period cost.
Why factory overhead cost is applied on production?
Factory overheads are incurred only and only due to production of the goods. That is why the factory overhead cost is applied to production.
What journal entry is made in a job order costing system when 8000 of material are requisitioned for general factory use instead of for use in a particular job?
The journal entry isManufacture Overhead 8000Raw Materials 8000
Is depreciation of factory plant and equipment a factory overhead cost?
YES
