Module 03 Discussion – Full Absorption vs. Variable Costing

After studying your assigned reading for this module, please answer the following questions. Where you are unclear on concepts please ask questions in the forum. In your response, please try to clarify for a classmate, an area where he/she might have a question.

• Compare and contrast the difference between variable and full costing.
• Describe why income calculated under full absorption costing will be greater than income calculated under variable costing when production exceeds sales.
• Explain how a manufacturing company can "bury" fixed manufacturing costs in ending inventory under full absorption costing.

Please make your initial post by midweek, and respond to at least one other student's post by the end of the week. Please check the Course Calendar for specific due dates.

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