ACCT208 Lecture Notes - Lecture 6: Voh, Total Absorption Costing, Fixed Cost

• School: University of Delaware
• Department: Accounting
• Course: ACCT208
• Professor: Dragone Debra

Document Summary

Ch3: normal costing with absorptions costing **have to use for external reporting gaap! Ch6: introduce vc using contribution margin i/s *internal use only. Goal: learn differences between 2 statements & reconcile noi between them. Dm, dl, voh, foh: operating cost (periodical cost) V selling & admin: fixed cost. Absorption: some foh is feferred (left) with the unsold units in fg inv. Variable: all foh is expensed in year incurred as a period cost. 1,000 units * 1. 50 = : formal reconciliation absorption and variable costing noi - format. + foh end fg inv absorption (end fg. Inv units * current year foh unit cost) Foh released from beg fg inv absorption (beg fg inv units * prior year foh unit cost) *there will be a difference in noi between absorption and vc methods when # of units produced does not equal # of units: production = sales (units) (no change in fg inv)