Purchase Solution

Differences Between Variable and Absorption Costing

Not what you're looking for?

Ask Custom Question

Could please assist me answering the questions below.

What are the differences between variable and absorption costing? Why is variable costing not allowed for GAAP reporting? Which method is more useful for internal decision-making? Why? As a manager, which would you prefer? Why?

The word count needs to be 200 or 300.

Purchase this Solution

Solution Summary

This solution of 230 words differentiates between variable and absorption costing as well as explains the applicability of both in GAAP and internal decision-making. Reference used is included.

Solution Preview

Dear Student,

Thank you for using BM.
Below are my answers.

Anna Liza Gaspar


First, absorption costing which is also called full costing requires that the full or total costs of producing a good or service be absorbed by that good or service (Anthony, Hawkins & Merchant, 2003, p. 629). Variable costing, as the name implies, ...

Purchase this Solution

Free BrainMass Quizzes
Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.