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.
  • Give advantages and disadvantages of variable costing system.

Number of pages: 4
Approximate time required: 2 – 2.5 hours

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