Variable Costing Flashcards
Other Term for Variable Costing
Direct Costing
For Internal Reporting
Other Terms for Absorption Costing
Full Costing
Traditional Costing
Conventional Costing
Satisfy External Reporting
Variable Costing
Two types of costs
Expenses
COGS
Variable Costing
4 Types of Costing
Variable Costing
Absorption Costing
Throughput/Supervariable/Engineering Costing
Super Absorption Costing
Fixed OH Computation for
- Absorption - Unit Cost x ____
- Varuable- Unit Cost x ______
- Units Sold, since Product Cost
- Units Produced, Period Cost
Dyan lang nag kaiba. The rest parehas na as follows:
Sales (Units soldxUC)
Variable COGS (USxUC)
Variable Exp (USxUC)
Fixed Expenses (Units ProducedxUC)
Variable vs. Abs Costing
Relationship Net Income?
P=S
P grtr than S
P less than S
P=S - AC=VC
P grtr than S - AC grtr than VC
P less than S - AC less than VC
Explain Product Cost of Variable vs. Abs Costing
The only diff is Fixed FOH which classified as period cost or outright expense in Variable Costing
Variable vs. Abs Costing
Income Statement Formula
AC:
S
-COGS
=GROSS PROFIT
-S&A Costs
=Profit
VC:
S
-Variable Costs (prod cost and exp)
=CM
-Fixed Costs (prod cost and exp)
=Profit
IMPORTANT!
Standard Costs (per cost type)=?
Actual Production Units x SC per unit!
So to know the variances(favorable or not), just compute the difference of Actual costs (PER Cost TYPE) vs Standard Costs
How to treat Favorable and Unfavorable (diff between actual vs. Standard cost) Costs in Income Statement under VC ans AC?
Basic. Under both method, if Favorable, deduct sa costs while add if unfavorable. BUT, Fixed OH variance is still ignore or disregarded sa VC!!
So to know the variances(if favorable or not), just compute the difference of Actual costs (PER Cost TYPE) vs Standard Costs
How to Treat FIXED FOH Variance under VC and AC?
As usua sa AC, deduct or add sa costs. While IGNORE SA VC
Pag Favorable, of course deduct sa costs, while add pag unfavorable!
Other term for Throughput Costing and what is the feature/definition?
Supervariable Costing
Treats DIRECT materials as the only variable/inventoriable costs!
Super Absorption Costing Features/Definition
Treats ALL COSTS as inventoriablencosts! As in lahat! Whether Exp or COGS
