Product Costing (Leaving Cert Accounting): Flashcards
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Product costing
Product costing
Calculating total cost of producing goods or services
Direct costs
Direct costs
Costs specifically identified with a particular product/dept
Fixed costs
Fixed costs
Costs that remain constant regardless of production levels
Variable costs
Variable costs
Costs that change in direct proportion to production volume
FIFO method
FIFO method
Stock received first is first to be issued for sale/production
Under FIFO, closing stock is valued using...
Under FIFO, closing stock is valued using...
Most recent purchase prices
Absorption costing
Absorption costing
Includes both direct costs & indirect costs in product cost
4 steps of absorption costing
4 steps of absorption costing
Allocation, apportionment, reapportionment, absorption
Over-absorption effect
Over-absorption effect
Profits greater (actual costs budgeted costs)
Under-absorption effect
Under-absorption effect
Profits lower (actual costs budgeted costs)