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One advantage of using absorption costing is that if you have items still in inventory at the end of an accounting period, you don't have to report the expense until the items are actually sold. The disadvantage is, this method can artificially increase your profit figures because the profit-and-loss statement isn't going to reflect all the expenses you had during the accounting period.
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What is the difference between absorption costing and active base costing?
there is have some differeance . 1.
What type of companies would benefit using the activity based costing?
Following type of companies1) Those who want to perform better2) Those who want to be competitiveWhat specific types of companies would be better served with variable costing as opposed to absorption costing? Why?
What are the advantages and disadvantages of target costing?
its when a female plant talks to a male plant about smoking a joint
What are the advantages of a costing system?
A costing system is usually incorporated to ascertain-the cost of each individual unit in the entityhow much should the selling price be to gain a desired profitto detect abnormal spoilage of goodsHowever one should make sure that the cost of such a system should not exceed the benefits.
What are four advantages of using price as an allocating mechanism?
The advantages of using price as an allocating mechanism include that it is a simple system and it is already known. Two other advantages are that it is easy to understand and it is universal.
Company using absorption costing?
It is old costing technique & it is replaced by activity based costing
If you were a candy manufacturer which costing system should you use full absorption costing or variable costing?
full absorption costing
Difference between absorption costing AND target costing?
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.
What is another name for absorption costing?
Full costing system
Differences between costing method and costing techniques?
Methods of Costing The cost of products or services is determined using several methods. The use of a given method is dictated by such factors as: the nature of cost units, the production process, the mode of cost accumulation, the duration of work etc. The following are the well established methods of costing a. Job / Batch costing b. Contract costing c. Process costing d. Service costing Techniques of Costing Irrespective of the type of costing method being applied there are various approaches that could be adopted. These are:  Full Absorption costing  Marginal costing  standard costing using  absorption costing  marginal costing
Difference between absorption and marginal 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.
What are the uses of marginal costing and absorption costing?
to calculate the profit easilly
Which costing method is used for external reporting purpose?
absorption costing
What are the differences between activity-based absorption costing system and traditional absorption costing system?
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.
Marginal costing and absorption costing which is favourable?
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What is an absorption costing?
An absorption costing is an accounting method used to calculate the total cost of a product by factoring in both direct and indirect costs.
Difference between activity based costing and absorption costing?
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.
