Gymstyles Ltd makes equipment for use in sports fitness classes. It has traditionally used a system of absorption costing to arrive at the costs of its range of products. During a recent pandemic the product managers at Gymstylesmade videos to accompany their products because they were not able to provide face to face safety training. The videos proved so popular that Gymstyles is about to launch a set of workout videos which will be sold with related sets of equipment.

The Management Accountant has been in discussions with the product managers about how to cost the videos and as a result management are considering changing from absorption costing to a more suitable method.

Compare absorption costing, marginal costing and one other costing method of your choice. Apply the theory of each of the costing methods to the case study above to illustrate your analysis.