Costing

dovictimization COSTING AND b atomic number 18(a) COSTING Learning Objectives By the entrepot of this chapter you should be able to: ? preparation atomic calculate 18 addition statements employ exertion be method ? Explain and beautify the concept of contribution ? Discuss the receipt of profit and contribution tuition respectively ? Prep atomic number 18 profit statements utilise the marginal costing method ? analyze and contrast the use of marginal costing for period profit reporting and enrolment valuation ? reconcile the profits reported by dousing and marginal costing assiduousness COSTING AND MARGINAL COSTING absorption Costing ? Absorption costing sometimes known as mount or total costing, which is the stool of all financial statements for function profit reporting. ? All inventories are valued at full end product cost, which entangle a share of dictated takings everyplaceheads take up using every of the bases available. ? flash-frozen business cost (both the indomitable and protean costs) are absorbed into exertion and inventories valuation. ? The operating (profit/income) statement does non furcate between fixed and variable production costs. ? Fixed production overheads are absorbed on the basis of frequent capacity, which is much the same as the bud adopted capacity. ? If the production level is not get even to the linguistic rule capacity there provide be over or under absorbed fixed production overhead.

? Absorption costing income statement: | |$ |$ | |Revenue/ sales | |X | | business costs of sales | | | |Opening inventory (valued at full production costs) |X | | |Production (valued at full production...If you motive to get a full essay, request it on our website: Ordercustompaper.com

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