What does the phrase mean by the fixed production cost absorbed by the ending inventory at full cost

Under the full cost method, the fixed manufacturing expenses only deduct the part of the sales, and the fixed manufacturing expenses in the inventory are not deducted, which enters the balance sheet and also increases the profit, and the fixed manufacturing expenses "absorbed" in the inventory are the profit difference between the variable cost method and the full cost method.

Under the variable cost method, only variable production costs are included in the cost of the product, and all fixed production costs are expensed, regardless of how many goods are sold. Under the full cost method, all production costs are included in the cost of the product, so only a portion of the fixed production costs are expensed (the portion that is sold). The remaining fixed production costs go into the remaining ending inventory of goods (which will not be regarded as current expenses), which is also called the absorbed fixed production costs.

Summary. Kiss! Hello, a blessing, a warmth, a touch.

Have a grateful heart. Life is full of touching! Your question has been received, it will take a little time to type, please wait a moment and please do not end the consultation.

You can also take this time to provide more effective information so that I can better answer for you. Hope mine can solve your problem and sort out the answer for you right away, please wait a moment!

What are the characteristics of the initial cost of the inventory obtained by different ** in terms of composition?

Kiss! Hello, a blessing, a warmth, a touch. Have a grateful heart.

Life is full of emotional impulses! Your question has been received, it will take a little time to type, please wait a moment and please do not end the consultation. You can also take this time to provide more effective information so that I can better answer for you.

I hope mine can solve your problem, and immediately sort out the answer for you, please wait for a while!

Hello, glad to answer for you. The characteristics of the initial cost of the inventory obtained by different ** in terms of composition are (1) the actual cost of the purchased inventory, according to the purchase price plus transportation costs, loading and unloading costs, insurance fees, packaging costs, storage fees and other expenses, reasonable wear and tear in transit, selection and finishing costs before warehousing, taxes and other expenses that should be included in the cost according to the regulations. (2) The self-made inventory shall be regarded as the actual cost according to the actual expenditure of each chain item in the manufacturing process.

3) Entrust the external unit to prepare the inventory completed by the remedial work, and the actual consumption of raw materials or semi-finished products, as well as processing costs, transportation costs, loading and unloading costs and insurance premiums, as well as taxes that should be included in the cost according to the regulations, as the actual cost.

Do you have any other questions? I can go on and on for you to answer 3I hope this service can help you, you can click on my avatar to follow me, and if you have any questions in the future, you can consult me again, and look forward to serving you again.

Wishing you well; Have a good life and all the best! 4.If you are satisfied with my service, please give a thumbs up, and I wish you all the best!

Peace and joy <>

In July 2009, the self-study exam "Management Accounting (1)" real question calculation question 2.

The Company's finished products are calculated using the first-in-first-out method, assuming that there is no change in sales and administrative expenses in the month).

Requirements: (1) Calculate the cost of inventory at the end of the period under the full cost method.

2) Calculate profit before tax for the period under the variable cost method and the full cost method.

Proofreading Answer:(1) Under the full cost method, the cost per unit of product = 40 + 22500 4500 = 45 (yuan).

Ending inventory = 300 + 4500-300 - (4000-300) = 800 (pieces).

Inventory cost at the end of the period = 45 800 = 36000 (yuan).

2) Under the variable cost method: 4000 80-4000 40-22500-30000 = 107500 (yuan).

Under the full cost method: 4000 80-3700 45-300 * 43-30000 = 110600 (yuan).

In management accounting, what does the absorption and release of fixed production costs in the opening inventory release mean in the fixed production costs absorbed by the ending inventory?

Hello, because management accounting is variable cost recognition of income, generally according to cost accounting, inventory cost includes a limb collapse fixed manufacturing costs, through more production, you can allocate product costs to inventory in cost accounting, even if there is no sales, but still reduce your operating costs, through the adjustment of production volume to achieve the purpose of controlling costs. This is the absorption of fixed production costs. with release.

Related information: manufacturing expenses absorbed by the ending inventory - in the fixed manufacturing expenses released by the opening inventory, the absorption and release represent what the fixed manufacturing costs released by the opening inventory refer to the number of inventories sold in the previous period multiplied by the distribution rate of the fixed manufacturing expenses in the previous period, which is the amount generated by the sales of the previous inventory in the current period.

Summary. Hello, glad to answer for you. What does the fixed manufacturing expense that is released from inventory by the full cost method mean:

The full cost method is to calculate the product cost and inventory cost, and take all the costs of direct materials, direct labor, variable manufacturing expenses and fixed manufacturing expenses consumed in the production process in a certain period of time.

Hello, glad to answer for you. What does the full cost method mean when calculating the cost of products and the cost of inventory, the full cost method is to carefully reduce the cost of direct materials, direct labor, variable manufacturing costs and fixed manufacturing expenses consumed in the production process in a certain period of time.

Total cost, also known as full cost, is the total cost incurred by an enterprise in producing and selling a certain number and type of products or services in a certain period of time.

Hello, glad to answer for you. Fixed manufacturing expenses refer to the fixed costs paid for manufacturing products in the manufacturing industry.

Summary. Marginal costing is a method of management accounting. It is used to calculate the production cost of products or services of an enterprise in a certain period, to value finished products and products in process and inventory, and to measure the profits obtained by the enterprise.

Under the marginal cost method, all the costs of a business are divided into fixed costs and variable costs. As defined by the Chartered Institute of Management Accountants; The marginal cost method is an accounting system in which the cost unit includes only variable costs, and the fixed costs for a given period are all written off from the marginal contribution gross profit. The rationale for this treatment of fixed and variable costs is:

Variable costs vary with each product produced, while fixed costs are paid regardless of the amount produced. Therefore, the contribution gross profit is first used to make up for the fixed costs, such as excess compensation is profit, and insufficient compensation is loss.

Your question has been received, it will take a little time to type, please wait a while, please don't end the consultation, you can also provide more effective information, so that I can answer for you more coarsely and dry.

Marginal costing is a method of management accounting. It is used to calculate the production cost of products or services of an enterprise in a certain period, to value finished products and products in process and inventory, and to measure the profits obtained by the enterprise. Under the marginal cost method, all the costs of a business are divided into fixed costs and variable costs.

As defined by the Chartered Institute of Management Accountants; The marginal cost method is a system in which the unit of cost includes only variable costs, and the fixed costs of a certain period are all written off from the marginal contribution gross profit. The rationale for this treatment of fixed and variable costs is that with each product produced, variable costs change, while fixed costs are paid regardless of the amount produced.

Therefore, the gross profit of the contribution is first used to make up for the fixed costs, such as the excess compensation is the benefit of the old and the return of the elderly, and the insufficient compensation is the loss.

Marginal costing. Does the inventory cost at the end of the period include fixed costs?

There is a fixed cost included.

What is the difference between inter-cost and absorption costing in cost accounting?

Hello, there are only the above answers to the questions you have inquired about, I hope it will help you.

1. "If the inventory adopts planned cost accounting, the planned cost shall be adjusted to the actual cost at the end of the period. This statement is inaccurate. The original words in the accounting standard are "If the planned cost is used for the daily accounting of materials, the materials issued should also carry forward the material cost differences, will."Issuing materials's planned costs are adjusted to actual costs.

2. Description. 1. Accounting Standards for Business Enterprises No. 1 - Inventory mainly regulates the recognition, measurement and disclosure of relevant information of inventory. The inventory acquired by the enterprise should be measured at cost. The cost of inventory calculated by the planned cost method in the daily accounting of enterprises is essentially the actual cost of inventory.

For example, with planned costing, the planned cost of a material or finished product is adjusted to the actual cost through the Material Cost Variance or Product Cost Variance account.

2. The daily receipt and delivery and balance of the inventory of the enterprise can be based on actual cost accounting or planned cost accounting. When the material adopts the planned cost accounting, the sending, receiving and closing of the material, regardless of the general classification accounting or the detailed classification accounting, are valued according to the planned cost. The ledger accounts used are "Raw Materials", "Material Purchases", "Material Cost Variances", and so on.

The difference between the actual cost of the material and the planned cost is accounted for through the Material Cost Variance account. At the end of the month, calculate and allocate the cost difference to be borne by the materials issued in the current month, and include the cost of the relevant assets or the profit or loss of the current period according to the use of the materials received, so as to adjust the planned cost of the issued materials to the actual cost.

There is no need to adjust, and the meaning of your sentence can be understood as the actual cost is listed in the balance sheet inventory item, because every time you buy materials, you also increase the difference in the cost of materials; When the material is collected, the material cost difference is also carried forward to the production cost difference, and the cost difference account is used as a deduction item, and when it is listed in the closing statement = inventory standard cost + - inventory cost difference = actual cost.