Absorption vs Variable Costing
Tuesday, April 8th, 2008
AWARD WINNER - Training Category
This podcast explains the differences between the two approaches to measuring profit: Absorption vs Variable Costing. It will show examples as to what causes the differences in operating income when each approach is used, and which method gives a more useful number when it comes to making decisions. Absorption Costing assigns a share of FMOH to each unit, while Variable Costing expenses all FMOH as a period cost.