There are two methods of determining product cost: the absorption costing method and the variable costing method.
- Explain how costs are calculated using both the absorption costing method and the variable costing method.
- Which method is required by the generally accepted accounting principles (GAAP)?
- Develop an example in columnar format that compares the two methods of cost calculation using the following table:
The unit product cost of the company is computed as follows:
|
Absorption costing |
Variable costing |
Direct materials |
|
|
Direct labor |
|
|
Variable manufacturing overhead |
|
|
Fixed manufacturing overhead |
|
|
Total unit cost |
|
|
What Students Are Saying About Us
.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐"Honestly, I was afraid to send my paper to you, but you proved you are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"
.......... Customer ID: 11***| Rating: ⭐⭐⭐⭐⭐
"This company is the best there is. They saved me so many times, I cannot even keep count. Now I recommend it to all my friends, and none of them have complained about it. The writers here are excellent."