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Variable and Absorption - costs = Gross margin(variable non...

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Absorption and Variable Costing Absorption Costing Variable Costing Also called Full Costing Direct Costing Required by GAAP For internal use Product Cost DM+ DL+ Variable MOH+ Fixed MOH DM+ DL+ Variable MOH DM and DL (Variable costs) Recorded as it is Recorded as it is Fixed MOH Allocation just for produced units => need to check the beginning inventory costs Recorded as it is Income Statement Sales - COGS (fixed & variable mfg
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Unformatted text preview: costs) = Gross margin-(variable non mfg costs)-(fixed non mfg costs) = Operating Income Sales-(variable mfg costs) = Manufacturing contribution margin-(variable non mfg costs) = Contribution margin-(fixed mfg costs)-(fixed non mfg costs) = Operating income Operating income Increased by increasing in production Increase by reducing costs The impact of fixe costs on profit Hidden Obvious...
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