ECONOMICS

Detailed explanation-1: -Full costing, or absorption costing, accounts for all costs, both fixed and variable along with overhead, that go into a finished product. Advantages of full costing include compliance with reporting rules and greater transparency.

Detailed explanation-2: -What is the difference between full absorption costing and variable costing? A. In full absorption costing, all of the non-manufacturing costs are expensed. In variable costing, all of the non-manufacturing expenses are included in the cost of the product.

Detailed explanation-3: -Under the direct costing method, fixed manufacturing overhead costs are expensed during the period in which they are incurred. Under the full costing method, fixed manufacturing overhead costs are expensed when the product is sold.

Detailed explanation-4: -Absorption costing, sometimes called “full costing, ” is a managerial accounting method for capturing all costs associated with manufacturing a particular product. All direct and indirect costs, such as direct materials, direct labor, rent, and insurance, are accounted for when using this method.