Coursework Example | Topics and Well Written Essays - 750 words - 2

Coursework Examplethat the company should consider includes ensuring that the quality of the products is not compromised at any time as this will help to maintain the sales levels and the profit margin. immersion representing also known as full costing is a costing technique that nurture the closing stocks at the fill production cost including the fixed production be. This method treats the fixed costs as product costs and they argon incurred when the stock has been sold. The cost per unit constitutes both the fixed and the variable quantity production costs.The process of absorption costing is as follows gathering the altogether data from the financial records, classifying the raw data in respect to the type of expense a process known as coding, cost analysis, determination of the cost centres that provide services to production cost centres, identify product cost centres that are involved directly with the production process and finally bang absorption.This technique can be a pply in antithetical types of organizations that deal with the production and manufacturing of various products. For example the organizations that deal with sales have different costs that can be absorbed using the absorption technique to prepare the financial statements. A manufacturing organization is another example where this technique can be applied to absorb the various overhead costs using the direct costs incurred as the cost centres for allocation of the overheads.Absorption costing absorbs the bestow overheads into production and this generates implications when measuring performance, cost control and also the valuation of stocks. It is worth noting that the fixed costs do not vary with the level of activity and therefore this can lead to managers making incorrect decisiveness about the business operations. Additionally, absorption costing allocates the overhead costs including the fixed costs on the undercoat of the cost driver. This method can be biased in determinin g the cost driver for apiece cost and therefore this