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Absorption costing:
It is a costing in which the company includes all the cost including the fixed costing in order to determine the cost of a product.
It is the costing method that a company is required to use for calculating and filing its taxes.
Variable costing:
It is the costing which includes all type of variable cost. It is an accounting method used to allocate production to its cost and it is done during the period.
Requirement 1:
To calculate:
The Total production cost per unit if 12500 units were produced.
Absorption costing:
It is a costing in which the company includes all the cost including the fixed costing in order to determine the cost of a product.
It is the costing method that a company is required to use for calculating and filing its taxes.
Variable costing:
It is the costing which includes all type of variable cost. It is an accounting method used to allocate production to its cost and it is done during the period.
Requirement 2:
To indicate:
The difference between the Income under the variable costing and absorption costing.
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Chapter 6 Solutions
Managerial Accounting
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Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College