Description
- Discuss what absorption, variables, and throughput costing are.
- Determine when each would be used.
- Provide an explanation and example of all three.
Explanation & Answer
Here you go. Sorry for the late reply. I had a PC problem. However, I have completed the report. I hope it is to your satisfaction.
Running head: COST ACCOUNTING METHODS
1
A DISCUSSION ON ABSORPTION, VARIABLES AND THROUGHPUT COSTING
Cost Accounting
Cost accounting is a process that involves analyzing, summarizing and recording costs that
are associated with the production process and allocating them to specific products or
services. The costs are initially recorded separately and thereafter the input and output costs
are matched in order to find the company’s financial performance. In order to optimize
business processes and plan for the future the cost information obtained is shared with the
management. However, there are different techniques of cost accounting. Among them are,
Absorption Costing, Variable Costing, and Throughput Costing.
Absorption Costing
Also referred to as full costing, absorption costing is the process by which total overheads are
a...
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