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What is Variable costing and absorption costing?
Variable costing and absorption costing are effective methods to know the cost of a unit product. All famed companies in the world follow by almost all industries and both the methods are different. It is not possible to substitute one method with another one or the variable costing with absorption costing because both have some limitation along with their benefits.
In case of absorption costing, product cost consists of manufacturing cost which is fixed and also all the cost of the variables. The manufacturing cost means direct material, overhead of the factory along with direct labor. In case of variable cost, all non-manufacturing and manufacturing is regarded as the fixed cost. Information related to variable costing is followed by the internal management, whereas if absorption costing takes place, then its information is utilized by internal as well as external management. Our Variable costing and absorption costing Assignment Help team says that, students need to be conscious while completing their assignments.
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