08-26-2009, 08:35 PM
Direct Costing
A costing method that includes only variable manufacturing costs-direct materials, direct labor, and variable overhead- in the cost of a unit or product. It is also called Marginal Costing and Variable costing.
Moreover........
Method in which the cost of a product or operation is determined by allocating to it an appropriate portion of the variable (direct) costs. Direct costing treats fixed costs (overheads such as administrative and selling costs) as period costs (associated with time and not output). Also called contribution costing or variable costing. See also absorption costing and marginal costing.
Absorption Costing
A costing method that includes all manufacturing costs- direct materials, direct labor, and both variable and fixed manufacturing overhead- in the cost of a unit of product. Absorption costing is also referred to as the full cost method.
A costing method that includes only variable manufacturing costs-direct materials, direct labor, and variable overhead- in the cost of a unit or product. It is also called Marginal Costing and Variable costing.
Moreover........
Method in which the cost of a product or operation is determined by allocating to it an appropriate portion of the variable (direct) costs. Direct costing treats fixed costs (overheads such as administrative and selling costs) as period costs (associated with time and not output). Also called contribution costing or variable costing. See also absorption costing and marginal costing.
Absorption Costing
A costing method that includes all manufacturing costs- direct materials, direct labor, and both variable and fixed manufacturing overhead- in the cost of a unit of product. Absorption costing is also referred to as the full cost method.
