Discover how absorption costing is used in GAAP for external reporting. Learn its components and why it's essential for ...

Inventory cost often is the primary concern when dealing with inventories. Companies not only want efficient inventory cost management, but also need appropriate financial reporting on inventory cost.

Two methods are commonly employed to value inventory -- variable costing and absorption costing. The difference between the two is in their treatment of operational overhead. Variable costing only ...

Companies must choose between absorption costing and variable costing in their accounting systems, and there are advantages and disadvantages to either choice. Absorption costing, also known as full ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...