Week 8- Introduction to absorption costing Flashcards
What is job costing?
A job costing system is one where there are many uniquely identifiable products/services
Associated with a manufacturing business, and also used in the service sector
What is a manufacturing overhead?
Costs other than material and labour which cannot be traced directly to products.
What can be classed as manufacturing overheads in a manufacturing business?
Repair of machinery
Rent of factory buildings
What can be classed as manufacturing overheads in a service business?
Cost of transport to jobs
Replacement of tools
Production overhead costs comprises of what:
1- Indirect materials
2- Indirect labours
3- Production overhead cost
What is variable costing?
Includes only variable cost (direct and indirect) in cost of product.
What is full costing?
Includes direct cost (fixed and variable) in cost of product
