Direct Costing Vs. Absorption Costing
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Authors
Iacuone, Nick A. Jr.
Issue Date
1977
Type
Thesis
Language
en_US
Keywords
Business , Direct costing , Absorption costing , Production
Alternative Title
Abstract
Direct Costing is a method of cost accounting in which only those costs which are a direct result of production of the product are assigned to the product and all costs associated with the providing of plant capacity to produce the product are treated as expenses in the period. In Absorption Costing not only those costs which can be directly assigned to a product but fixed costs as well are included in the cost of production. This paper was undertaken with the intent of utilyzing the skills I have acquired over the past several years in Absorption Costing and comparing that against what I have researched and studied on Direct Costing. The basic item of difference between advocates of absorption costing valuation on one hand, and of direct costing valuation on the other hand, is in the definition of and distinction between fixed and variable manufacturing cost. In my report, I have reported on both Direct and Absorption Costing views concerning the validity of the charge of fixed cost to inventory. I have also tried to show how direct costing information can be used in planning and controlling costs in an organization in all departments, not only the production department. It is now my belief that a Direct Costing System can be a very important tool to the financial manager if properly utilized.
Description
This thesis is being archived as a Digitized Shelf Copy for campus access to current students and staff only. We currently cannot provide this open access without the author's permission. If you are the author of this work and desire to provide it open access or wish access removed, please contact the Wahlstrom Library to discuss permission.
Citation
N. Iacuone, "Direct Costing Vs. Absorption Costing", MBA dissertation, School of Business, Univ. of Bridgeport, Bridgeport, CT, 1977.