Akuntansi Manajemen Edisi 8 oleh Hansen & Mowen Bab 4Dwi Wahyu
Materi Bab 4 Activity Based Product Costing, Akuntansi Manajemen buku Hansen & Mowen Edisi 8. Presentasi powerpoint oleh Gail B. Wright, Professor Emeritus of Accounting, Bryant University
Conversion Cycle for all types of business, principle and goal of lean manufacturing, productions methods used in different organizations and the activities and documents of Traditional manufacturing environment.
Process costing explained with examples free of cost .It is for students of managerial accounting ,read this to quickly go through process costing.
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Akuntansi Manajemen Edisi 8 oleh Hansen & Mowen Bab 4Dwi Wahyu
Materi Bab 4 Activity Based Product Costing, Akuntansi Manajemen buku Hansen & Mowen Edisi 8. Presentasi powerpoint oleh Gail B. Wright, Professor Emeritus of Accounting, Bryant University
Conversion Cycle for all types of business, principle and goal of lean manufacturing, productions methods used in different organizations and the activities and documents of Traditional manufacturing environment.
Process costing explained with examples free of cost .It is for students of managerial accounting ,read this to quickly go through process costing.
http://www.brightscholarships.com
Twitter @scholarshipskys
Income statement Functional Format,Linear cost Function,Method of Analyzing cost,Comparison of variable costing , unit cost computation, Illustration of variable costing , evaluation of results. Managerial Accounting
Cozy Bookstore Case Study CLA2Variable upward can be depCruzIbarra161
Cozy Bookstore Case Study CLA2
Variable upward can be depicted as those overheads that typically change straightforwardly corresponding and like the varieties in the particular creation exercises, cost drivers, some remarkable volume measures or deals movement (Schiff, 1987). The ramifications is that an increment or reduction in the expense causes a corresponding increment or abatement in the expense or volume driver. On a similar note, the variable expense change proportionately and comparatively to the results or the association's movement levels (Hasan, 2015). In such manner, variable expenses are commonly founded on the exercises given that an organization normally brings about them because of the action, work done or yield. This suggests that in the event that the association's result significantly increases, costs will likewise significantly increase (Largay, 1973). Also, shutting down an organization for quite a while, no factor costs will be caused.
Accepting that Green Valley produces noodle, the organization will require unrefined components like sugar, different flavors, salt, flour, sodium bicarbonate, vegetable oils, and starch (Fu, 2008). On a similar note, the organization will without a doubt enlist work and concentrated machines to settle the item. In this way, the item should be bundled in very much planned bundles (Hyun et al., 2011). In this case, variable costing includes direct costs, work and unrefined substances. The presumption here is that Green Valley should buy material per bundle at Rs 2. It additionally needs to cater for the work in view of the piece rate framework where they offer five rupees for every parcel. Also, the organization needs to cause different backhanded costs incorporate 10,000 rupees for the creation site's lease. Creation gear is supposed to deteriorate (Del Giudice et al., 2016) with 20,000 rupees. In addition, the publicizing costs are 20,000 rupees, with sales rep commission costing three rupees for every bundle. Then again, Green Valley intends to deliver 10,000 bundles and charges 25 rupees for every parcel.
Based on the above information;
Total variable costs of manufacturing each packet = Direct Expenses + Labor + Materials= 2 + 5 + 2= 9 rupees for each packet.
The Total variable cost for distribution and selling costs for each packet = Labelling and packaging + Commission paid to the salesmen.= 5 + 2 = 5 Rupees for every packet.
Total variable cost for the noodles = 14 Rupees each packet
Total fixed manufacturing cost = compensation + Depreciation + Rent= 20, 000 + 20, 000 + 10, 000= 50, 000 Rupees.
Total fixed distribution as well as selling cost = Warehouse rent + Advertising= 20, 000 + 10, 000 = 30, 000 Rupees.
Total fixed cost = 80, 000 Rupees.
Green Valley Corporation
Variable costing based income statement
Particulars
Amount
Amount
Sales Revenue (10, 000 * 25)
250, 000
Less: Variable Cost
Material for 2
10, 000
Labor for 5
50, 000
Sales commission for 3
30, 000
Direct exp ...
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ACCT 505 Week 1-7 All Discussion Questions
ACCT 505 Week 1 Case Study
ACCT 505 Week 2 Quiz Job Order and Process Costing Systems
ACCT 505 Week 2 Quiz Set 2
Similar to Variable costing a tool for management (20)
Implicitly or explicitly all competing businesses employ a strategy to select a mix
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Memorandum Of Association Constitution of Company.pptseri bangash
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A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
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Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
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Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
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Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
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Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
What are the main advantages of using HR recruiter services.pdfHumanResourceDimensi1
HR recruiter services offer top talents to companies according to their specific needs. They handle all recruitment tasks from job posting to onboarding and help companies concentrate on their business growth. With their expertise and years of experience, they streamline the hiring process and save time and resources for the company.
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Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Personal Brand Statement:
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Attending a job Interview for B1 and B2 Englsih learnersErika906060
It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
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Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
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2. Overview of Absorption and Variable
Costing
Absorption
Costing
Variable
Costing
Direct Materials
Product
Costs
Direct Labor
Product
Costs
Variable Manufacturing Overhead
Fixed Manufacturing Overhead
Period
Costs
Variable Selling and Administrative Expenses
Period
Costs
Fixed Selling and Administrative Expenses
Muhammad Sario, Sukkur IBA
7-2
3. Unit Cost Computations
Harvey Company produces a single product
with the following information available:
Number of units produced annually
Variable costs per unit:
Direct materials, direct labor,
and variable mfg. overhead
Selling & administrative expenses
$
$
Fixed costs per year:
Manufacturing overhead
Selling & administrative expenses
$ 150,000
$ 100,000
Muhammad Sario, Sukkur IBA
25,000
10
3
7-3
4. Unit Cost Computations
Unit product cost is determined as follows:
Absorption
Costing
Direct materials, direct labor,
and variable mfg. overhead
Fixed mfg. overhead
($150,000 ÷ 25,000 units)
Unit product cost
Variable
Costing
$
10
$
10
$
6
16
$
10
Under absorption costing, all production costs, variable
and fixed, are included when determining unit product
cost. Under variable costing, only the variable
production costs are included in product costs.
Muhammad Sario, Sukkur IBA
7-4
5. Income Comparison of
Absorption and Variable Costing
Let’s assume the following additional information
for Harvey Company.
20,000 units were sold during the year at a price
of $30 each.
There is no beginning inventory.
Now, let’s compute net operating
income using both absorption
and variable costing.
Muhammad Sario, Sukkur IBA
7-5
6. Absorption Costing
Absorption Costing
Sales (20,000 × $30)
Less cost of goods sold:
Beginning inventory
$
Add COGM (25,000 × $16)
400,000
Goods available for sale
400,000
Ending inventory (5,000 × $16)
80,000
Gross margin
Less selling & admin. exp.
Variable (20,000 × $3)
$ 60,000
Fixed
100,000
Net operating income
$ 600,000
320,000
280,000
160,000
$ 120,000
Fixed manufacturing overhead deferred in
inventory is 5,000 units × $6 = $30,000.
Muhammad Sario, Sukkur IBA
7-6
7. Variable Costing
Variable
manufacturing
Variable Costing
costs only.
Sales (20,000 × $30)
Less variable expenses:
Beginning inventory
$
Add COGM (25,000 × $10)
250,000
Goods available for sale
250,000
Less ending inventory (5,000 × $10)
50,000
Variable cost of goods sold
200,000
Variable selling & administrative
expenses (20,000 × $3)
60,000
Contribution margin
Less fixed expenses:
Manufacturing overhead
$ 150,000
Selling & administrative expenses 100,000
Net operating income
Muhammad Sario, Sukkur IBA
$ 600,000
All fixed
manufacturing
overhead is
expensed.
260,000
340,000
250,000
$ 90,000
7-7
8. Comparing the Two Methods
Cost of
Goods
Sold
Ending
Inventory
Period
Expense
Absorption costing
Variable mfg. costs $ 200,000
Fixed mfg. costs
120,000
$ 320,000
$ 50,000
30,000
$ 80,000
$
Variable costing
Variable mfg. costs $ 200,000
Fixed mfg. costs
$ 200,000
$ 50,000
$ 50,000
$
Muhammad Sario, Sukkur IBA
$
-
150,000
$ 150,000
Total
$ 250,000
150,000
$ 400,000
$ 250,000
150,000
$ 400,000
7-8
9. Comparing the Two Methods
We can reconcile the difference between
absorption and variable income as follows:
Variable costing net operating income
$ 90,000
Add: Fixed mfg. overhead costs
deferred in inventory
(5,000 units × $6 per unit)
30,000
Absorption costing net operating income $ 120,000
Fixed mfg. overhead
$150,000
=
= $6 per unit
Units produced
25,000 units
Muhammad Sario, Sukkur IBA
7-9
10. Extended Comparisons of Income Data
Harvey Company – Year Two
Number of units produced
Number of units sold
Units in beginning inventory
Unit sales price
Variable costs per unit:
Direct materials, direct labor
variable mfg. overhead
Selling & administrative
expenses
Fixed costs per year:
Manufacturing overhead
Selling & administrative
expenses
Muhammad Sario, Sukkur IBA
25,000
30,000
5,000
$
30
$
10
$
3
$ 150,000
$ 100,000
7-10
11. Unit Cost Computations
Absorption
Costing
Direct materials, direct labor,
and variable mfg. overhead
Fixed mfg. overhead
($150,000 ÷ 25,000 units)
Unit product cost
Variable
Costing
$
10
$
10
$
6
16
$
10
Since the variable costs per unit, total fixed costs,
and the number of units produced remained
unchanged, the unit cost computations also
remain unchanged.
Muhammad Sario, Sukkur IBA
7-11
12. Absorption Costing
Unit product
Sales (30,000 × $30)
Less cost of goods sold:
Beg. inventory (5,000 × $16)
Add COGM (25,000 × $16)
Goods available for sale
Less ending inventory
Gross margin
Less selling & admin. exp.
Variable (30,000 × $3)
Fixed
Net operating income
Absorption Costing
cost.
$ 900,000
$ 80,000
400,000
480,000
-
$ 90,000
100,000
480,000
420,000
190,000
$ 230,000
Fixed manufacturing overhead released from
inventory is 5,000 units × $6 = $30,000.
Muhammad Sario, Sukkur IBA
7-12
13. Variable Costing
Variable
manufacturing
costs only. Variable Costing
Sales (30,000 × $30)
$ 900,000
Less variable expenses:
Beg. inventory (5,000 × $10)
$ 50,000
Add COGM (25,000 × $10)
250,000
All fixed
Goods available for sale
300,000
manufacturing
Less ending inventory
overhead is
Variable cost of goods sold
300,000
expensed.
Variable selling & administrative
expenses (30,000 × $3)
90,000
390,000
Contribution margin
510,000
Less fixed expenses:
Manufacturing overhead
$ 150,000
Selling & administrative expenses
100,000
250,000
Net operating income
$ 260,000
Muhammad Sario, Sukkur IBA
7-13
14. Comparing the Two Methods
We can reconcile the difference between
absorption and variable income as follows:
Variable costing net operating income
$ 260,000
Deduct: Fixed manufacturing overhead
costs released from inventory
(5,000 units × $6 per unit)
30,000
Absorption costing net operating income $ 230,000
Fixed mfg. overhead
$150,000
=
= $6 per unit
Units produced
25,000 units
Muhammad Sario, Sukkur IBA
7-14
15. Comparing the Two Methods
Costing Method
Absorption
Variable
1st Period
$ 120,000
90,000
Muhammad Sario, Sukkur IBA
2nd Period
$ 230,000
260,000
Total
$ 350,000
350,000
7-15
16. Summary of Key Insights
Relation between
production
and sales
Units produced
=
Units sold
Units produced
>
Units sold
Units produced
<
Units sold
Muhammad Sario, Sukkur IBA
Effect
on
iniventories
No change
In
inventories
Inventories
Increase
Inventories
decrease
Relation between
variable and
absorption income
Absorption
=
Variable
Absorption
>
Variable
Absorption
<
Variable
7-16
17. CVP Analysis, Decision Making
and Absorption costing
Absorption costing does not dovetail with CVP analysis,
nor does it support decision making. It treats fixed
manufacturing overhead as a variable cost. It assigns per
unit fixed manufacturing overhead costs to production.
Treating fixed manufacturing overhead as a
Treating
overhead as
variable cost can:
• Lead to faulty pricing decisions and faulty
• Lead to faulty
and faulty
keep-or-drop decisions.
decisions.
Assigning per unit fixed manufacturing overhead
per unit
overhead
costs to production can:
to
can:
• Potentially produce positive net operating income
even when the number of units sold is less than
the breakeven point.
Muhammad Sario, Sukkur IBA
7-17
18. External Reporting and Income Taxes
To conform to
To conform to
GAAP requirements,
GAAP requirements,
absorption costing must be used for
absorption costing must be used for
external financial reports in the
external financial reports in the
Under the Tax
Under the Tax
United States.
United States.
Reform Act of 1986,
Reform Act of 1986,
absorption costing must be
absorption costing must be
used when filling out
used when filling out
Since top executives
Since top executives
income tax returns.
income tax returns.
are typically evaluated based on
are typically evaluated based on
earnings reported to shareholders
earnings reported to shareholders
in external reports, they may feel that
in external reports, they may feel that
decisions should be based on
decisions should be based on
absorption costing data.
absorption costing data.
Muhammad Sario, Sukkur IBA
7-18
19. Advantages of Variable Costing
and the Contribution Approach
Management finds
it more useful.
Advantages
Impact of fixed
costs on profits
emphasized.
Muhammad Sario, Sukkur IBA
Consistent with
CVP analysis.
Net operating income
is closer to
net cash flow.
Consistent with standard
costs and flexible budgeting.
Easier to estimate profitability
of products and segments.
Profit is not affected by
changes in inventories.
7-19
20. Impact of Lean Production
When companies use Lean Production . . .
Production
tends to equal
sales . . .
So, the difference between variable and
absorption income tends to disappear.
Muhammad Sario, Sukkur IBA
7-20
Chapter 7: Variable Costing: A Tool for Management.
Two general approaches are used for valuing inventories and cost of goods sold. One approach, called absorption costing, is generally used for external reporting purposes. The other approach, called variable costing, is preferred by some managers for internal decision making and must be used when an income statement is prepared in the contribution format. This chapter shows how these two methods differ from each other.
Absorption costing (also called the full cost method) treats all costs of production as product costs, regardless of whether they are variable or fixed. Since no distinction is made between variable and fixed costs, absorption costing is not well suited for CVP computations. Under absorption costing, the cost of a unit of product consists of direct materials, direct labor, and both variable and fixed overhead. Variable and fixed selling and administrative expenses are treated as period costs and are deducted from revenue as incurred.
Variable costing (also called direct costing or marginal costing) treats only those costs of production that vary with output as product costs. This approach dovetails with the contribution approach income statement and supports CVP analysis because of its emphasis on separating variable and fixed costs. The cost of a unit of product consists of direct materials, direct labor, and variable overhead. Fixed manufacturing overhead, and both variable and fixed selling and administrative expenses are treated as period costs and deducted from revenue as incurred.
Think about the impact of each method on inventory values, and then answer the following question.
Harvey Company produces 25,000 units of a single product. Variable manufacturing costs total $10 per unit. Variable selling and administrative expenses are $3 per unit. Fixed manufacturing overhead for the year is $150,000 and fixed selling and administrative expenses for the year are $100,000.
The unit product costs under absorption and variable costing would be $16 and $10, respectively. Under absorption costing, all production costs, variable and fixed, are included when determining unit product cost. Under variable costing, only the variable production costs are included in product costs.
We need some additional information to allow us to prepare income statements for Harvey Company:
20,000 units were sold during the year.
The selling price per unit is $30.
There is no beginning inventory.
Now let’s prepare income statements for Harvey Company. We will start with an absorption income statement.
Part I.
Harvey sold only 20,000 of the 25,000 units produced, leaving 5,000 units in ending inventory. At a sales price of $30 per unit, sales revenue for the 20,000 units sold is $600,000. At a unit product cost of $16, cost of goods sold for the 20,000 units sold is $320,000. Subtracting cost of goods sold from sales, we find the gross margin of $280,000. After subtracting selling and administrative expenses from the gross margin, we see that net operating income is $120,000.
Part II.
Fixed manufacturing overhead deferred in inventory, as a result of the 5,000 unsold units at $6 of fixed overhead per unit, is $30,000.
Now let’s examine a variable cost income statement. Notice that this is a contribution format statement. First, we subtract all variable expenses from sales to get contribution margin. At a product cost of $10 per unit, the variable cost of goods sold for 20,000 units is $200,000. The next variable expense is the variable selling and administrative expense. After computing contribution margin, we subtract fixed expenses to get the $90,000 net operating income. Note that all $150,000 of fixed manufacturing overhead is expensed in the current period.
Under absorption costing, $120,000 of fixed manufacturing overhead is included in cost of goods sold and $30,000 is deferred in ending inventory as an asset on the balance sheet. Under variable costing, the entire $150,000 of fixed manufacturing overhead is treated as a period expense.
The variable costing ending inventory is $30,000 less than absorption costing, thus explaining the difference in net operating income between the two methods.
The difference in net operating income between the two methods ($30,000) can also be reconciled by multiplying the number of units in ending inventory (5,000 units) by the fixed manufacturing overhead per unit ($6) that is deferred in ending inventory under absorption costing.
In the second year, Harvey Company sells 30,000 units. The selling price per unit, variable costs per unit, total fixed costs, and number of units produced remain unchanged. Five thousand units are in beginning inventory, left from last year.
Since the variable costs per unit, total fixed costs, and the number of units produced remained unchanged, the unit cost computations also remain unchanged.
Part I.
Of the 30,000 units sold in the second year, 25,000 units were produced in the second year and 5,000 units came from beginning inventory. The $30,000 of fixed manufacturing overhead deferred into inventory in the first year is released from inventory this year as part of the $16 unit product cost. Selling and administrative expenses are deducted from gross margin to obtain the net operating income of $230,000.
Part II.
Fixed manufacturing overhead is released from inventory as a result of the 5,000 units sold in the second year that were produced in the first year. The amount released is $30,000 (5,000 units at $6 of fixed overhead per unit).
Now, let’s examine a variable cost income statement for the second year. Again, notice that this is a contribution format statement. At a product cost of $10 per unit, the variable cost of goods sold for 30,000 units is $300,000.
After computing contribution margin, we subtract fixed expenses to get the $260,000 net operating income. Note that all $150,000 of fixed manufacturing overhead is expensed in the current period.
The difference in net operating income between the two methods ($30,000) can be reconciled by multiplying the number of units in beginning inventory (5,000 units) by the fixed manufacturing overhead per unit ($6) that is released from beginning inventory under absorption costing.
Across the two-year time frame, both methods reported the same total net operating income ($350,000). This is because over an extended period of time sales cannot exceed production, nor can production much exceed sales. The shorter the time period, the more the net operating income figures will tend to differ.
On your screen is a summary of what we have observed from the Harvey Company’s two years:
When units produced equal units sold, the two methods report the same net operating income.
When units produced are greater units sold, as in year 1 for Harvey, absorption income is greater than variable costing income.
When units produced are less than units sold, as in year 2 for Harvey, absorption costing income is less than variable costing income.
Absorption costing does not dovetail with CVP analysis, nor does it support decision making. It treats fixed manufacturing overhead as a variable cost. This can lead to faulty pricing decisions and faulty keep-or-drop decisions. It also assigns per unit fixed manufacturing overhead costs to production. This can potentially produce positive net operating income even when the number of units sold is less than the breakeven point.
Practically speaking, absorption costing is required for external reports in the United States. Under the Tax Reform Act of 1986, a form of absorption costing must be used when filling out income tax forms. Since top executives are typically evaluated based on earnings reported to shareholders in external reports, they may feel that decisions should be based on absorption costing data.
The advantages of variable costing and the contribution approach include:
The data required for CVP analysis can be taken directly from a contribution format income statement.
Profits move in the same direction as sales, assuming other things remain the same.
Managers often assume that unit product costs are variable costs. Under variable costing, this assumption is true.
Fixed costs appear explicitly on a contribution format income statement; thus, the impact of fixed costs on profits is emphasized.
Variable costing data make it easier to estimate the profitability of products, customers, and other business segments.
Variable costing ties in with cost control methods, such as standard costs and flexible budgeting.
Variable costing net operating income is closer to net cash flow than absorption costing net operating income.
When companies use Lean Production, the goal is to eliminate finished goods inventories and reduce work in process inventory to almost nothing. This causes absorption costing net operating income to essentially move in the same direction as sales. Therefore, the difference between absorption costing and variable costing income tends to disappear.