Absorption Costing

-


Absorption Costing is an accounting cost method which entails the complete cost of manufacturing or providing a service. It includes not just the cost of labour and materials but also the total manufacturing overheads, either fixed or variable. The cost of each cost center can be direct or indirect and is identified with individual cost centers like accounting, IT, maintenance, etc . Direct cost can be identified with individual cost centers whereas indirect cannot be.

The distribution of overheads among each department is called as apportionment. Apportionment can be done in two methods – the primary distribution of overheads and secondary distribution. In primary distribution, the selection of the base on which the overheads are apportioned depends on service or use basis, survey basis and ability to pay basis. Whereas in secondary apportionment the cost of service departments i.e., apportioned overheads along with the values of direct materials, labour and expenses of the concerned service department are redistributed.

This cost accounting method is often contrasted with variable costing or direct costing. In variable/direct costing the fixed manufacturing overhead costs are not absorbed by the manufactured products but in absorption costing it is absorbed, as the name suggests.
The advantages of absorption costing include identifying the importance of fixed costs involved in production and also shows less fluctuation in net profits especially for firms with constant production but fluctuating sales. Absorption costing is necessary for external financial and income tax reporting.

Rajagiri Center for Business Studies is one of the top business schools in Kochi Kerala offers various post graduation courses like MBA, IMBA, MHRM and PGDM. With an amazing learning environment, best in class hostel facilities, top placement assistance and many more, Rajagiri Business School Cochin, the top b schools in Kerala promising you a better career and bright future. So if you wish to do MBA or PGDM in Kerala then RCBS, top b schools in Kochi is the right choice for you.  

To Know More  https://rcbs.rajagiri.edu/

Location: Kerala, India

Comments

Post a Comment

Popular posts from this blog

Bridge Loan

-
Image
A short term loan that is used until a person or company secures permanent financing or removes an obligation that is currently existing is called as a bridge loan. Bridge loans allow users to meet their current obligations by providing them with immediate cash flow. They are short-term loans that has relatively higher interest rates and are usually backed by a collateral like real estate or inventory. In UK, it is usually called as bridging loan, caveat loan or swing loan. They are typically more expensive than other conventional methods of financing. Also, they come with a higher rate of interest, points and other costs that are amortized over a shorter period, and various sweeteners like equity participation by lender in some loans. Bridge loans are arranged quickly in a short period of time with relatively less documentation. Bridge loans in real estate is used for quickly closing property purchases, to retrieve real estate from foreclosure or to take advantage of short-term
Read more

4 REASONS TO DO AN MBA IN KERALA INDIA

-
Image
Apart from other post-graduation courses, MBA is a distinguished degree that enables individuals to excel in their professional career path. A professional looks for several degrees to boost his career. The most common post-graduation degree in India pursued nowadays is MBA. This post-graduation course holds immense importance in the thriving market scenario. The prime aim of MBA degree is to create an entrepreneur or a professional who can manage all parameters of a business. But still many students in our country are skeptical about pursuing MBA course for several reasons. Here Are 4 Reasons To Do An MBA Program In Kerala India 1. Career Growth You may start your career mostly in an operational role. After working smartly and putting a lot of hard work you’re getting a promotion. And after that your promotion even with good work experience may limited to an extend due to academic profile. Pursuing an MBA degree can switch your career path to a much higher profile with la
Read more

SIGNIFICANCE OF PURSUING MBA IN A ROBUST ECONOMY LIKE INDIA

-
Image
An MBA degree is considered as one of the best post-graduation course across the globe is also growing by leaps and bounds in India. With several MBA colleges in Kochi Kerala India have included MBA courses in their curriculum and graduates are opting for those respected MBA courses. Many international students are also eyeing MBA courses in Kerala India giving the reputation of Business Schools situated here. There are various types of MBA courses that you can choose anyone depending on your interest and criteria. Most of the students are going for full time MBA courses right after they complete graduation degree. The Indian scenario of students thriving to MBA courses is also because that Indians are gradually started moving from an agricultural-based economy to a business and knowledge-based economy. Several types of careers are benefited by MBA courses as it helps to increase the knowledge about the market and business world and adds a handsome pay package. In a recent
Read more