What is the difference between full absorption costing and variable costing? Variable costing must be used for
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Question:
What is the difference between full absorption costing and variable costing?
Variable costing must be used for external financial reports while full absorption costing can only be used for internal reporting.
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.
In full absorption costing, fixed manufacturing overhead is included in the cost of the product. In variable costing, fixed manufacturing overhead is expensed.
In full absorption costing, fixed manufacturing overhead is expensed. In variable costing, fixed manufacturing overhead is included in the cost of the product.
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