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What is absorption costing?
It is one of the accounting cost methods of management that includes the expenses on the product which includes cost of manufacturing a single product. Absorption costing is a necessary platform required for external reporting like GAAP. The direct costs which are associated with the direct manufacturing are the wages of the man power, raw materials, and costs which are over headed like utility costing.
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In other words, we can say that absorption cost includes every direct cost which is included in the manufacturing or production procedure of a product in the company. These cost are important to consider as the profit margins, and the selling price of the end products are decided on the basis of the direct costing which is included in Absorption costing.
Students can learn in detail about every direct costing included in absorption costing with our manuals as absorption costing and performance measurement homework help.
What is performance measurement?
Performance management is a term used for analyzing the information on the performance of the man power and other staff including the managers of the company. It is helpful in monitoring the components of the company and how a group or an individual is affecting the revenue generation in a firm.
And hence, performance measurement plays a significant role in monitoring the roles and function of group and individuals working in the similar manufacturing company as mentioned before. It is important for students to understand the relationship between performance measurement and absorption costing. In order to understand the same, you must take assistance under absorption costing and performance measurement assignment help.
Performance measurement is closely related to absorption costing as the wages of the man power is fluctuated with performance measurement factor in absorption costing. So when the performance measure reflects excellent ratio of appreciation, the wages included in the calculation of absorption costing is affected by the same. And hence, such a costing is directly affected in the venture.
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