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Gunjan posted an Question
March 25, 2021 • 19:02 pm 30 points
  • UGC NET
  • Commerce

Absorption costing ka meaning btana easy ay mai

absorption costing ka meaning btana easy way mai and standard costing and estimated costing mai difference hota hai kya

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  • Rucha rajesh shingvekar

    Introduction. Absorption costing refers to a method of costing to account for all the costs of manufacturing. The management uses this method to absorb the costs incurred on a product. The costs include direct costs and indirect costs. ... Indirect costs include factory rent, administration costs, compliance, and insurance 

  • Priya gulani

    https://www.assignmentpoint.com/business/accounting/difference-standard-cost-estimated-cost.html for more help

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  • Priya gulani best-answer

    Absorption costing is a method for accumulating the costs associated with a production process and apportioning them to individual products. This type of costing is required by the accounting standards to create an inventory valuation that is stated in an organization's balance sheet. A product may absorb a broad range of fixed and variable costs. These costs are not recognized as expenses in the month when an entity pays for them. Instead, they remain in inventory as an asset until such time as the inventory is sold; at that point, they are charged to the cost of goods sold. The Components of Absorption Costing The key costs assigned to products under an absorption costing system are: Direct materials. Those materials that are included in a finished product. Direct labor. The factory labor costs required to construct a product. Variable manufacturing overhead. The costs to operate a manufacturing facility, which vary with production volume. Examples are supplies and electricity for production equipment. Fixed manufacturing overhead. The costs to operate a manufacturing facility, which do not vary with production volume. Examples are rent and insurance.

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