MARGINS - Chapter 3 Variable and Full Costing Prepared by...

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Prepared by Diane Tanner University of North Chapter 3 Variable and Full Costing
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Measuring Product Costs Includes all costs necessary to get products ready to sell Two methods to determine product costs Full (absorption) costing Required for GAAP reporting Emphasizes the cost function Variable costing Used for internal decision making 2 Helps managers make product decisions as it Is easy to predict how costs will behave in the future
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Merchandising Vs. Manufacturing Merchandising companies Buy goods to sell Product costs reported Merchandise Inventory on the balance sheet Cost of Goods Sold on the income statement Manufacturing companies Buy materials to produce products to sell Product costs reported Raw Materials, Work in Process, Finished 3
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4 Full Costing Income Statement 4 Gross margin is the amount available to cover operating expenses and to go Inventory costs include ALL product costs, both fixed and variable Materials, labor and fixed and variable
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This note was uploaded on 04/07/2012 for the course ACC 301 taught by Professor Leejones during the Fall '11 term at DeVry Chicago.

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MARGINS - Chapter 3 Variable and Full Costing Prepared by...

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