differential costing
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
One of your acquaintances notes, "The whole subject of differential costing is easy; variable costs are the only costs that are relevant." How would you respond?
The post will need to be a minimum of 100 words. A proper response will include some of the concepts from the chapter, though you will need to reiterate the information in your own words and analysis of the concepts. Remember to write your answer as if you are talking to a non-accountant!
Differential costs means the difference in the costs between two alternatives. It is a mix of fixed and variable costs.
however, variable costs are the costs which change with a change in the output.
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