Absorption and marginal costing (Relevant to AAT Examination Paper 3: Management Accounting) Li Tak Ming‚ Andy Deputy Head‚ Department of Business Administration‚ Hong Kong Institute of Vocational Education (Kwai Chung) Introduction Absorption costing and marginal costing are alternative cost accumulation systems used to ascertain product or job costs for inventory valuation and cost of sales. Absorption costing Absorption costing includes both variable and fixed production costs in the
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CHAPTER 8 ABSORPTION AND VARIABLE COSTING Learning Objectives 1. Explain the accounting treatment of fixed manufacturing overhead under absorption and variable costing. 2. Prepare an income statement under absorption costing. 3. Prepare an income statement under variable costing. 4. Reconcile reported income under absorption and variable costing. 5. Explain the implications of absorption and variable costing for cost-volume-profit analysis. 6. Evaluate absorption and variable
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MARGINAL AND ABSORPTION COSTING Marginal costing is a technique in which production units are valued at marginal cost of production and fixed costs are written off as period costs. It follows that‚ stocks are valued using only the variable cost of production whereas fixed costs are treated as relating to the period and must be taken off in total. Management accounting is based on marginal costing. TERMINOLOGY USED. Gross contribution: Is the difference between sales value and variable costs
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Variable costing vs Absorption costing Variable and Absorption costing are two different methods and ways that many organizations use to determine and calculate product cost. The income statements formats of both methods include period and product costs. However‚ each one has a different cost classification definition. Both have the same direct material and direct labor allocation‚ the differences is how they report the income‚ product‚ and pricing One of the main differences between
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Abstract: This experiment explores the technique of absorption spectroscopy. The procedures deal with the wavelengths and absorption of dyes in a sample of grape Kool-aid. The use of Beer’s Law helps to determine values of absorption. Introduction: This experiment demonstrates another technique used in the analysis molecules with light. The study of light absorbed my molecules is known as absorption spectroscopy. This is very easily the opposite of emission spectroscopy because it occurs when
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Digestion/ Absorption and Homeostasis In order to survive‚ our bodies must bring in energy and nutrients for the cells of the body through eating and digestion of food. To be carried to the cells of the body by the blood stream‚ food must be broken down to molecules. This breaking down of food into molecules‚ small enough to be absorbed into and carried through the blood stream‚ is carried out by the digestive system through the process of digestion and absorption. Digestion is the process of
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When deciding between self-sufficiency vs. specialization it is important to decide what is more important for the company. In this case‚ as a manager‚ is it more important for my employees to produce more financial statements or phone calls? The reason this must be decided is because it will influence the decision on which path to choose. Francis is able to produce two financial statements or 10 phone calls per hour. Phil is able to produce one financial statement or eight phone calls per hour
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Smith Ms. Wheeler P6 AP Language 15 April 2013 Society’s Standards vs. Self Everyone likes to think that they are a unique individual who is not controlled or influenced by society. But all societies‚ no matter what type‚ have standards. People are what make up society‚ and they effect society’s expectations. But how do society’s standards influence one’s view of self and their actions? Standards affect one’s idea of self by giving one a superficial idea of what is the norm‚ and this view affects
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Altruism vs. Self-Interest; Who is the Real Winner? Altruistic acts extend across the whole world‚ from humans to all different kinds of animals. Soldiers storming the beaches of Normandy for the freedom of our country to Vervet monkeys sounding loud alarms to warn of threats even though it draws a predators attention to themselves (Crowl 1). Altruism and self-interest are inherent motivations in all species and will continue to be forever. Personally‚ whenever I hold the door for someone it
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investments Examines factors to include in any cost comparison Provides a sample cost/benefit analysis While these concerns underlie the value-driven 34 The Information Management Journal • May/June 2007 Enterprise Content Management vs. Business Process Management Solutions While enterprise content management (ECM) and business process management (BPM) software solutions have similarities‚ their focus is different‚ and they are seen by analysts‚ such as the Gartner Group‚ as being
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