Does absorption costing incorporate just fixed production overheads or both fixed production and non-production overheads into the cost of product?
And what is the very basic difference between absorption costing and marginal costing?
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Absorption Costing and Marginal Costing
7y ago#1Only production overheads are incorporated into the product cost.
Absorption costing incorporates fixed production overheads into the unit cost, marginal cost does not incorporate fixed overheads into the unit cost but charges them against the contribution as a time-based cost.
This is all explained in my free lectures on marginal and absorption costing.
The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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