Variable Costing Method

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Introduction Variable Costing Method: Method of variable costing is a method where costing can be discovered including the variable manufacturing costs. Fixed factory visual projection is delighted as a period cost-it is abstracted along with the selling and administrative expenses in the period deserved. That is, Fixed factory visual projection is taking care as a period expense. Uses of Variable Costing Method: Variable costing method is used only for internal management. Uses of variable costing method include: * Inventory estimation and revenue determination; * Break-even investigation and Cost-Volume-Profit investigation; * Appropriate cost analysis; and * Short-term decision-making. Variable costing method is, however, not suitable for external coverage or income tax coverage. Companies that use variable costing method for internal coverage must convert into absorption costing for external coverage. Under absorption costing, the cost to be recorded includi...
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