Concept explainers
Variable Costing:
It refers to the method of product costing in which the price of the product is calculated considering only the variable or direct costs or the cost that happened to occurred due to the product only. It is also called as marginal costing as it takes marginal costs while calculating the product cost.
Absorption Costing:
It refers to the method of product costing in which the price of the product is calculated considering all the fixed as well as the variable or direct costs. The
To identify: At least one specific decision in context in which absorption costing is more relevant than variable costing and one specific decision in which variable costing is more relevant than absorption costing.

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Chapter 6 Solutions
Managerial Accounting
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