Variable Costing : The method of costing which considers only variable cost, for calculating the product costs is called as variable costing. Variable costing method is useful for establishing the lowest cost at which a particular product can be sold. Absorption Costing: The absorption costing is the method of costing in which all the costs are included which are associated with the manufacturing process of the product. To Write: A memo to the chief financial officer explaining the costing approach, which will yield higher income, and their differences.

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Chapter 6, Problem 6.19BE

To determine

Variable Costing: The method of costing which considers only variable cost, for calculating the product costs is called as variable costing. Variable costing method is useful for establishing the lowest cost at which a particular product can be sold.

Absorption Costing:

The absorption costing is the method of costing in which all the costs are included which are associated with the manufacturing process of the product.

To Write: A memo to the chief financial officer explaining the costing approach, which will yield higher income, and their differences.

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