Product and Absorption Costing
Allocation and apportionment of overheads to cost centres. Calculating the total cost of a product using absorption costing methods.
About This Topic
Allocation and apportionment of overheads to cost centres. Calculating the total cost of a product using absorption costing methods.
Key Questions
- How are indirect costs apportioned across different departments?
- What is an overhead absorption rate (OAR)?
- How does absorption costing differ from marginal costing in valuing inventory?
More in Management Accounting
Marginal Costing
Understanding cost behaviour and the separation of fixed and variable costs. Application of marginal costing to decision-making and break-even analysis.
2 methodologies
Budgeting and Cash Budgets
The role of budgeting in planning and control. Preparation of cash budgets to forecast future cash flows and identify financing needs.
2 methodologies
Flexible Budgeting
Preparing budgets for different levels of activity. Comparing actual results with flexible budgets to calculate variances.
2 methodologies