4 A B Absorption accounting, also known as full costing, is a widely used accounting method in financial reporting that allocates all manufacturing costs, both

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4 A B Absorption accounting, also known as full costing, is a widely used accounting method in financial reporting that allocates all manufacturing costs, both foxed and varlable, to the cost of products or services. This approach aims to provide a more accurate representation of the true cost of production, including the portion of fixed overhead costs attributed to each unit. Let's delve into various aspects of absorption accounting and its implications: A. Principles of Absorption Accounting: Define absorption accounting and explain the fundamental principles underlying this approach. How does it differ from variable costing, and what are the key ob]ectives of applying absorption accounting in financial reporting? Discuss the components of manufacturing costs under absorption accounting, distinguishing between direct and indirect costs. How are these costs allocated to products, and why is the allocation of fixed overhead costs particularly significant in this method