Variable costing: variable costing is a managerial accounting cost concept.Under this method,manufacturing overhead is incurred in the period that a product is produce.A cost of labor, material or overhead that changes according to the change in the volume of production unit.
Prof. Ray H Garison & Eric W. Noreen—" Variable costing is a costing method that includes only variable manufacturing cost Variable material, Variable labor and manufacturing overhead in the cost of unit of product".
Absorption Costing:Absorption costing is a method for accumulating fixed and variable costs associated with the production process and apportioning them to individual product.A managerial accounting cost method of expensing all costs associated with manufacturing a particular product.Absorption costing uses the total direct cost and overhead costs associated with manufacturing a product as the cost base.
Prof E.L. Lohler—" Absorption costing is the process of allocating all on a position of Fixed an variable production cost to WIP,cost of sales and inventory".
No comments:
Post a Comment