A method of calculating the cost of a product or enterprise by taking into account indirect expenses (overheads) as well as direct costs.
Example sentencesExamples
- It can bee seen that it is clear that the method of absorption costing adopted can have far reaching implications when considering the costing of any job.
- The argument for using absorption costing in external reports seems to be based on the matching principle.
- This is not to say that there is no role for absorption costing in business.
- The ATO opinion was that full absorption costing was necessary for all retail and wholesale businesses.
- This booklet covers key areas within absorption costing such as product and period cost, advantages of marginal costing and advantages of absorption costing, and when to use these methods.