In differential analysis for customer decisions, sales predictions, variable input costs, and unallocated overhead costs are traced directly to customers, rather than to product lines.ġ.In differential analysis used customer decisions, discounted prices, increasing costs, and stop/loss costs are traced directly to customers, rather than to product lines.In differential analysis for customer decisions, sales revenue, variable costs, and fixed costs are traced directly to customers, rather than to product lines.In differential analysis for customer decisions, factor costs, shadow costs, and imputed costs are traced directly to customers rather than to product lines.Why is net profit always greater in absorption costing than indirect costing? Why cost accountants use two types of costing methods i-e absorption costing and direct costing? Identify a case where absorption costing yields higher net profit than direct costing? Absorption costing uses (a) and variable costing uses neither.Įxample 5.Variable costing uses (a) and absorption costing uses neither.Variable costing uses (a) and absorption costing uses (b).Absorption costing uses (a) and variable costing uses (b).at the time the finished units to which the fixed overhead relates are sold. Determine which costing method (variable costing or absorption costing) accounts for fixed manufacturing costs as costs of the period:Ī. neither variable costing nor absorption costing.Įxample 4.variable costing but not absorption costing.absorption costing but not variable costing.both absorption costing and variable costing.The term gross margin is used in reports prepared using: Product Cost under absorption Period Cost under variableĮxample 3.Period Cost under absorption Period Cost under variable.
Period Cost under absorption Product Cost under variable.Product Cost under absorption Product Cost under variable.
How would ABC Company treat fixed manufacturing costs, under the absorption costing method and the variable costing method?
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