In this video, on Marginal Costing vs Absorption Costing, here we discuss top differences between Marginal Costing vs Absorption Costing along with infographics and comparison table.
๐๐ก๐๐ญ ๐ข๐ฌ ๐๐๐ซ๐ ๐ข๐ง๐๐ฅ ๐๐จ๐ฌ๐ญ๐ข๐ง๐ ?
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Marginal costing is a method which considers the variable costs as the cost of the product and the fixed costs as the cost of the period
๐๐ก๐๐ญ ๐ข๐ฌ ๐๐๐ฌ๐จ๐ซ๐ฉ๐ญ๐ข๐จ๐ง ๐๐จ๐ฌ๐ญ๐ข๐ง๐ ?
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Absorption costing is a method which considers both fixed and variable costs as product cost
๐๐ข๐๐๐๐ซ๐๐ง๐๐ ๐๐๐ญ๐ฐ๐๐๐ง ๐๐๐ซ๐ ๐ข๐ง๐๐ฅ ๐๐จ๐ฌ๐ญ๐ข๐ง๐ ๐ฏ๐ฌ ๐๐๐ฌ๐จ๐ซ๐ฉ๐ญ๐ข๐จ๐ง ๐๐จ๐ฌ๐ญ๐ข๐ง๐
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#1 – Marginal costing doesnโt take fixed costs into account under product costing or inventory valuation. Whereas, Absorption costing takes both fixed costs and variable costs into account.
#2 – Marginal costing can be categorized as fixed costs and variable costs.Whereas, Absorption costing can be categorized as production, distribution, and selling & administration.
#3 – Marginal costing can be measured as a contribution per unit. Whereas, Absorption costing can be measured as net profit per unit.
To know more about the ๐๐๐ซ๐ ๐ข๐ง๐๐ฅ ๐๐จ๐ฌ๐ญ๐ข๐ง๐ ๐ฏ๐ฌ ๐๐๐ฌ๐จ๐ซ๐ฉ๐ญ๐ข๐จ๐ง ๐๐จ๐ฌ๐ญ๐ข๐ง๐ , you can go to this ๐ฅ๐ข๐ง๐ค ๐ก๐๐ซ๐:- https://www.wallstreetmojo.com/marginal-costing-vs-absorption-costing/
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