Product Costing

Absorption-Variable Costing

Computation of Product Cost/ Inventoriable Cost

Needed:
Computation of Inventory
Computation of COGS
NOTE: for manufacturing firms only

MANUFACTURING COST ONLY

Materials, Labor, OH
Selling and Admin (Never)
Will never be part of MI of COGS

Absorption
Variable
Super Variable (Throughput)

ABS/ Full Costing/Conventional

Sales – COGS = GP – OPEX = Profit

No production – still incur selling and admin

(period cost, regardless of production)

Full – all MFG are included

Conventional – old style

VARIABLE COSTING FORMAT

SALES –VC = CM – FXC = PROFIT

Direct Costing – “terminology”

Strictly speaking – treatment of FIXED MOH

COMPARE THE THREE

Throughput Costing – considers only Materials as

PRODUCT COST