Huge syllabus to learn, loads of problems to solve and an important project to be submitted in a day or two – is this the case with you?
Well, you are not alone. There are thousands of Accounts students just like you, who are facing the same problem, especially when the exams are knocking at the door. But, if you know exactly how to fight these problems and how to complete your homework on time, it will never be a problem for you further.
Difficult topics such as Variable and Absorption Costing Reconciliation make it even more difficult to complete the homework on time. To be frank, when I was a student, even I was annoyed with this topic as it took a lot of time to learn and complete projects on this topic. But, if you clear your doubts regarding how these costing factors work, it would be easier for you to write the variable and absorption costing reconciliation homework answers.
About variable and absorption costing:
To begin with, you must understand what Variable and Absorption Costing mean. In brief words, Variable and Absorption Costing are costing methods. They are quite different from each other. However, you will need to learn and apply both methods to manage your accounting tasks. Neither of the two can substitute the other.
Hence, all the major business companies in the world use both these costing methods in their firm or accounts department.
- Absorption costing method:
The most common or generally used costing method is Absorption Costing, which is also known as Full Costing Method. In this method, the manufacturing costs are included in inventory in the form of product costs. Post sales, the inventory costs are transferred to goods costs. Thus, the manufacturing costs reduce the gross profit.
- Variable costing method:
Variable Costing Method is used when Absorption Costing has its limitations. In this method, as the name suggests, the inventory includes variable production costs.
Costs included in variable and absorption costing method:
While writing the variable and absorption costing reconciliation homework answers, you must mention the particular types of costs that the inventory includes.
Absorption Costing includes –
- Direct material costs
- Variable manufacturing overhead costs
- Direct labor costs
- Fixed manufacturing overhead costs.
Along with these, there is also the inclusion of Period Expenses that include SG&A, which means selling, general and administrative costs.
In case of Variable Costing method, along with the costs of direct materials, direct labor, only variable manufacturing overhead costs are included. Fixed manufacturing overhead costs are not included in this accounting method.
Variable and absorption costing reconciliation:
Variable and absorption costing reconciliation homework answers must clearly show the relationship and reconciliation between Variable and Absorption Costing Methods. In both these methods, the amount of net income largely differs. This largely owes to the size of the inventory that keeps changing.
When the inventory increases in size, the amount is something, and when it decreases in size, the amount also changes.
This change can be expressed through the expressions –
Difference in net income = (Difference in product cost per unit)x (Change in the size of inventory units).
Different cases with variable and absorption costing reconciliation:
When you are doing your homework or writing your variable and absorption costing reconciliation homework answers, it is important that you express the difference between both these methods through various cases.
These cases would include –
- When production is equal to sales
- When production is less than sales
- When production is greater than sales
- When there is dissimilarity between the treatments of fixed factory overheads.
Each of these cases should be expressed through examples.
Solve variable and absorption costing reconciliation problems:
Now that you have understood, how Variable and Absorption Costing Reconciliation works, it should be easier for you to write your answers. When I was a student, I always followed these principles for writing my answers. No matter how much time it took, I went through the examples and formulas and then solved the problems.
Once you know the formulas or have a clear concept of how each of these factors is working, it will be easier for you to solve the problems. All that you need to do is simply put the figures in the formulas, and you will be all set to receive the conclusion.
How to write variable and absorption costing reconciliation homework answers?
It can indeed be a problem for you to understand where you should start from. Even I had been through this problem during my school days. At those times, I used to hire the professional homework help companies. These companies are very useful in providing you the right solution to your problems.
When you hire the professionals to write the variable and absorption costing reconciliation homework answers for you, you can be relieved that your answer would be the best. Once you take their help, it will teach you how to start and how to end your answer.
If you are writing them on your own, make sure that you use a crisp language that is easy to understand, use more figures than words and include examples. If you are given a problem to solve, stick to the problem and solve it in as detailed a manner as possible. This will not only fetch you better marks but will also eliminate the chances of skipping or missing out any crucial factor. So, do not worry anymore and start writing your answers now!