ACCT1003_Marginal_Costing

ACCT1003_Marginal_Co - Marginal Costing Marginal Costing Marginal Costing(MC Internal tool used by management Two main features i Separates all

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Marginal Costing Marginal Costing Marginal Costing (MC): Internal tool used by management Two main features: i. Separates all costs into fixed and variable Fixed costs are considered to be period costs and are expensed in the period incurred ii.Calculates contribution MC assigns only variable manufacturing overheads to products. Absorption Costing (AC): External tool Assigns both variable and fixed manufacturing overhead to production. GAAP requirement MC v AC MC v AC Direct Materials Direct Labour Variable Production O/H Fixed Production O/H Non-Production O/H Marginal Costing Absorption Costing Product Cost Product Cost Product Cost Period Cost Period Cost Product Cost Product Cost Product Cost Product Cost Period Cost Cost Element The difference between MC & AC lies in how FPO are treated. Under MC they are treated as period costs Under AC they are treated as product costs Income Statement Format Contribution Margin Conventional Marginal Costing Statement...
View Full Document

This note was uploaded on 11/12/2011 for the course ACCR 1003 taught by Professor Marginalcosting during the Spring '11 term at St. Augustine IL.

Page1 / 14

ACCT1003_Marginal_Co - Marginal Costing Marginal Costing Marginal Costing(MC Internal tool used by management Two main features i Separates all

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online