absorption costing的意思|示意

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Absorption costing，also known as full costing, is an accounting practice where all costs related to production are accounted for in the cost of the product. This includes both direct and indirect costs, such as labor, materials and overhead costs.

Absorption costing is typically used when calculating the cost of goods sold or the cost of a product, both of which form the basis of a company's inventory valuation and related cost of sales calculations.

Specifically, absorption costing includes direct labor, such as the payroll costs of employees who are working on the product; direct materials, such as the raw materials purchased for use in the production process; and overhead, such as indirect costs related to producing the product, like factory rent, utilities and depreciation.

It is important to note that absorption costing is different from the more commonly used type of product costing called \\"variable costing,\\" which only includes direct materials and direct labor costs in the cost of a product.

Absorption costing is considered to be a better option for measuring the profitability of product lines as it takes into account both fixed and variable costs. This is why it is used in financial statements and financial analysis.

For example, absorption costing is often used to calculate the number of units a company needs to sell in order to break even or to make a profit. In this case, the fixed costs are taken into account, which makes the calculation more accurate.

In conclusion, absorption costing is a common practice used to determine the cost of a product and its profitability. It takes into account both direct and indirect costs related to the production process, thus giving a more accurate picture of the cost of a product. This makes it an important tool in financial analysis.