Variable and absorption costing

[Explanations]

Learning objectives:

  • Explain the difference between variable costing and absorption costing approaches.
  • Compute the unit product cost under variable and absorption costing.
  • Prepare income statement using variable and absorption costing and explain the difference in net operating income under two costing systems.
  • What are the advantages and disadvantages of variable costing system?
  • What are the advantages and disadvantages of absorption costing system?

Number of pages: 5
Approximate time required: 2 – 2.5 hours

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