Which is more consistent with cost-volume-profit analysis, variable costing or absorption costing? Why?

Q: What is target costing and how is it different from the usual process of setting prices?

A: The price of a product is set on the basis of the cost of the product. The price of the product is…

Q: What is the basic difference between absorption costing and variable costing?

A:

Q: The advantages of standard costing exceeds its disadvantages. True or false? Explain further

A: Standard Costing The primary purpose of implementing the cost accounting system to any organisation…

Q: Cost-volume-profit analysis favors either variable costing or absorption costs. Why?

A: The CVP analysis is used to analyse the impact of changes in variable cost and fixed cost on net…

Q: How does standard costing differ from actual costing?

A: Actual cost system: An actual cost system uses actual costs for “direct materials, direct labor, and…

Q: What is different than traditional costing that uses a volume-based driver? Can you give me some…

A: There are many different types of costing methods, out of which the selection of costing method to…

Q: Why would someone use variable costing over absorption Costing ?

A: The variable costing method is the method that only includes the variable costing whereas,…

Q: Explain the difference between the variable and absorption costing methods.

A: Under Variable Costing method, only variable costs are considered which includes only variable cost…

Q: What is the amount of the difference between the variable costing and absorption costing net…

A: Sales             3,311,000  Variable costs       Direct Materials           1,161,000…

Q: What are the challenges of using the incremental cost allocation method when allocating common costs…

A: Cost Allocation Method:   The cost allocation method is the method by which the costs to be assigned…

Q: Why is absorption costing the method allowable for GAAP yet managers prefer variable costing

A: In variable costing only variable costs are included in the product cost. Fixed costs re considered…

Q: If the units produced exceed unit sales, which method would you expect to show the higher…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: Show income comparison's of absorption and variable costing?

A: Absorption costing method can be defined as the all the costs that is associated with the production…

Q: When units produced exceed units sold, how does operating income differ between variable costing and…

A: Absorption costing:   Absorption costing is compulsory under Generally Accepted Accounting…

Q: How is target costing different from the usual process of setting prices?

A: The price of a product is set on the basis of the cost of the product. The price of the product is…

Q: ow do I prepare an income statement based on variable co

A: In managerial accounting, variable costing is a cost concept. During the creation of a product…

Q: Timing is the key in distinguishing between absorption and variable costing. Explain this statement.

A: Definition: Variable costing: It refers to the method of product costing in which the price of the…

Q: What are the consequences of broad averaging on costs? Explain?

A: Broad Averaging:Broad averaging is also known as peanut butter cost is a costing approach of…

Q: Why do proponents of absorption costing argue that absorption costing is preferable as the basis for…

A: The absorption costing argue that absorption costing is preferable as the basis for pricing…

Q: Why is it necessary to distinguish between variable and fixed costs when dealing with mixed costs

A: Introduction:- Every Business expenses are classified as either fixed or variable costs. on other…

Q: How do step-wise costs and curvilinear costs differ?

A: There are different types of costs such as variable costs, fixed costs, step costs, and curvilinear…

Q: When will NOI under the variable costing method show higher income than under the absorption costing

A: Net Operating Income: It is a calculation used to assess the profitability of the business.

Q: What could be the reason for which you can have different income figures in absorption costing and…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: What is the difference between absorption-costing income and variable-costing income?

A: The income statement is prepared to record the revenues and expenses of the current period.

Q: Generally speaking, net operating income under variable and absorption costing will: Multiple Choice

A: The correct option is: be equal only when production and sales are equal.   Net Operating Income =…

Q: How does Lean Production reduce or eliminate the difference in reported net operating income between…

A: Absorption Costing: Absorption costing is a method for calculating the full cost or total cost of a…

Q: How do the cost flows in backflush costing systems differ from those in traditional costing systems?

A:

Q: What is the correlation between fixed, variable, and semi-variable costs??

A: Introduction:- Fixed Costs – Costs are same irrespective of the number of output produced Variable…

Q: determine unit cost under variable costing?

A: Costing techniques are important concept used in cost accounting branch. There are two type of…

Q: Assuming that direct labor is a variable cost, the primary difference between the absorption and…

A: Major difference between absorption and variable costing is fixed cost allocation across all units…

Q: Compare actual and normal costing. What is the benefit of each? What is a circumstance in which each…

A: Actual Costing: Actual costing is a cost bookkeeping framework that utilizes genuine cost,…

Q: Explain the difference between  - Absorption and Marginal Costing

A: The Question has covered the concept of Absorption and Marginal Costing. Absorption Costing The…

Q: How should mixed costs be classified in cost, volume, and profit analysis?

A: Based on the cost behaviour costs are classified as fixed costs , variable costs and mixed costs.…

Q: What are the advantages and disadvantages of ABC relative to the step-down method of cost…

A: ABC means Activity Based Costing. Costs will be allocated based on the activities the organization…

Q: How are absorption costing and variable costing the same? How are they different?

A: Absorption Costing: "Absorption costing is a method that allocates "direct labor, direct materials,…

Q: Difference between variable costing and absorption costing.

A: Absorption costing includes all costs, including fixed costs, related to production, while variable…

Q: How do current cost management techniques vary from earlier ones in terms of life cycle costing and…

A: Life cycle cost which traces the costs and revenues over a period of life of product.  Life cycle…

Q: What is the difference between absorption costing and variable costing?

A:

Q: key different in accounting for costs between absorption and variable costing

A: Absorption costing and variable costing are two methods of costing products.

Q: If the units produced and unit sales are equal, which method would you expect to show the highernet…

A: Absorption costing:   Absorption costing is compulsory under Generally Accepted Accounting…

Q: What is the main difference between activity-based costing and the theory of constraints? When is…

A: Costing: Costing is a technique used in cost accounting to determine the cost of a product. With…

Q: What are the pros/cons of product costing allocation methods and how they influence distortion of…

A: Product costing allocation methods are used to assign or allocate a cost to manufactured/produced…

Q: Is a variable costing income statement in service operations? If so, provide a hypothetical example…

A: Variable costing income statement deducts all the variable expenses from the revenues to get the…

Q: When units produced equal units sold, how does operating income differ between variable costing and…

A: Definition: Absorption Costing: It is a method of cost accounting where all the costs are related to…

Q: How is Variable Costing and Absorption Costing differs from each other?

A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.