Conclusion

• Absorption costing are those cost which include all the types of
manufacturing cost in product cost. It includes both variable as well
as fixed manufacturing costs. Its is also known as conventional or
traditional costing.
• Whereas, variable costing are also regarded as accounting cost
concept. Under, this method mfg overhead is incurred in the period
that a producr is produced. This addressing the issue of absorption
costing that allows income to rise as production rises.
Focus:
• These two methods vary based on the way that fixed overhead is
applied to the product cost.
• Where, product cost includes Direct material.Direct labour and
overheads.
• It includes COGS and Inventory.
• Only, these costs can be included in inventory.
USES:
• Variable costing method is mostly used by internal management for
decision making purposes.
• Absorption costing provides information that is used by internal
management as well as external parties.