Direct costing

[irfan kazim]

What is direct costing plz explain with suitable example that make my concept more clear about it

[faisal_desperado]

Irfan , Direct Costing, also called as marginal/variable costing is a cost accounting method under which only variable cost of production( Which is directly related to the volume of production)is treated as a cost of goods sold and fixed manufacturing cost( Fixed cost is that cost which is incurred regardless of volume of production) is ignored, the resultant figure ( Sales - Variable Cost) indicates Contribution margin.
The purpose of applying this method is to ascertain the Break Even point, decision making when there are some limiting factors, selection of a most profitable product among multiple products etc.

Best Regards,

[awaisaftab]

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by irfan kazim</i>
<br />What is direct costing plz explain with suitable example that make my concept more clear about it
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">

I have written a topic on direct costing you can also read it.

Regards,

Awais Aftab