Acc 561 Accounting Method Paper
Costing Method Paper
ACC/561
September 09, 2013
James Krause
Absorption accounting method according to E Notes (n.d.) “is a method of accounting where all costs of the manufacturing are included and are allocated to the produced units”. This would include fixed, variable and mixed costs. This type of accounting would allow a more accurate figure to supply to upper management about their product and what the bottom line is. This is the most important factor in Absorption accounting. The variable method is beneficial because it provides an output that is closer to the actual cash flow of a business. If a business is short on money this may be a better alternative.
Absorption costing is particularly useful for
ACC/561
September 09, 2013
James Krause
Absorption accounting method according to E Notes (n.d.) “is a method of accounting where all costs of the manufacturing are included and are allocated to the produced units”. This would include fixed, variable and mixed costs. This type of accounting would allow a more accurate figure to supply to upper management about their product and what the bottom line is. This is the most important factor in Absorption accounting. The variable method is beneficial because it provides an output that is closer to the actual cash flow of a business. If a business is short on money this may be a better alternative.
Absorption costing is particularly useful for