Variable Costing: The variable costing is the method of costing in which only the variable production costs such as the direct material, direct cost, and variable overhead costs are included in that time period in which they are incurred. Absorption Costing: The absorption costing is the method of costing in which all the costs are included which are associated with the manufacturing process of the product. To Describe: The difference between the absorption costing net income from the variable costing net income, when the production is greater than sales.

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Chapter 6, Problem 21Q

To determine

Variable Costing:

The variable costing is the method of costing in which only the variable production costs such as the direct material, direct cost, and variable overhead costs are included in that time period in which they are incurred.

Absorption Costing:

The absorption costing is the method of costing in which all the costs are included which are associated with the manufacturing process of the product.

To Describe: The difference between the absorption costing net income from the variable costing net income, when the production is greater than sales.

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