Method of computing costs that starts with Direct Costs (materials, direct labor, variable overhead) but adds non-variable overhead.
a method of costing used for some purposes - for example, to support pricing decisions and to derive performance measures - but not required for other purposes, as when one is looking at the effect of changes in the volume of output; ask the question, 'Am I looking at costs as they are now (full absorption costing) or am I seeking to examine the effect on costs of profitability of a change in volume costs (marginal costing)'
A principle where all the direct costs are allocated to cost units and overhead costs are apportioned according to a meaningful algorithm that attempts to reflect probable resource usage.
A principle where fixed and variable costs are allocated to cost units and overhead costs are absorbed according to activity levels
An approach to product costing whereby both fixed and variable manufacturing coast are aggregated into product costs and charged to inventories.