Question

Difference between absorption costing and variable costing

Answer 1

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Answer 2

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➡️ Absorption costing includes all costs, including fixed costs, related to production, while variable costing only includes the variable costs directly incurred in production.

➡️ Absorption costing, also known as full costing, entails allocating fixed overhead costs across all units produced for the period, resulting in a per-unit cost.

➡️ Variable costing can make it more difficult to determine ideal pricing for its goods and services, since it does not directly consider all of the costs.

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