Question

discuss the methods of cost absorption and state which method do you consider to be the best and why

Answer 1

Companies must choose between using absorption costing or variable costing in their accounting systems. Advantages and disadvantages come with either choice. Some of the primary advantages of absorption costing are that it recognizes all costs involved in production (including fixed costs), it does a better job of accurately tracking profit during an accounting period and that it is in compliance with the generally accepted accounting principles (GAAP).

Answer 2

Answer:

Answer :

• $\longmapsto$ Companies must choose between using absorption costing or variable costing in their accounting systems. Advantages and disadvantages come with either choice. Some of the primary advantages of absorption costing are that it recognizes all costs involved in production (including fixed costs), it does a better job of accurately tracking profit during an accounting period and that it is in compliance with the generally accepted accounting principles (GAAP).