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Marginal Costing:
a- Treats all variable cost (manufacturing or non-manufacturing ) as product cost.
b-Treats all fixed cost (manufacturing or non-manufacturing) as period cost.Absorption Costing:
a-Treats all production overheads (variable or fixed) as product cost.
b-Treats Variable non-manufacturing overhead as PRODUCT cost.
c-treats only fixed non-manufacturing overhead as period cost.Sir all these statements are correct?Please correct which is wrong ?
Correct, except insofar as non-manufacturing costs are never included in the cost of goods sold or in the valuation of inventory – whether it is absorption or marginal costing.
I do suggest that you watch our free lectures. They cover this and are a complete course for Paper F2, covering everything needed to be able to pass the exam well.
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