Direct cost is that cost which is directly identifiable with production volume while direct costing is the method or process through which direct cost is allocated to production.
difference between cost and costing
direct costing is a technique in which costs are classified as direct cost or indirect cost.
actual costing uses actual indirect-cost rates normal costing uses budgeted indirect-cost rates
False. Activity-based costing is used to allocate indirect cost into direct costs.Regardng direct cost, traditional costing is as appropriate as activity-based costing.
Direct cost is that cost which is directly identifiable with production volume while direct costing is the method or process through which direct cost is allocated to production.
difference between cost and costing
direct costing is a technique in which costs are classified as direct cost or indirect cost.
actual costing uses actual indirect-cost rates normal costing uses budgeted indirect-cost rates
False. Activity-based costing is used to allocate indirect cost into direct costs.Regardng direct cost, traditional costing is as appropriate as activity-based costing.
Over costing means charging more costs to items than it's actual cost while under costing means charging less cost then actual costs.
direct cost has direct relation with product manufacturing while indirect cost not and not identifiable with cost as well.
Marginal costing is a technique of costing where the variable expenses are charged to a product. It ignores the fixed expenses incurred by the business in fixing the price of a product on the assumption that the fixed expenses are not incurred in producing an additional unit.They are treated as period costs& charged directly to P& L A/C.Marginal cost is the cost of producing an additional unit of product.It takes the direct expenses & the variable portion of the overhead expenditure. But Direct costing takes into account only the direct expenses like direct mterials, direct labour & direct expenditure for finding out the cost of a product.
marginal costing is recommended by IAS and absorption costing is not recommended by IAS,marginal costing is used for internal purposes and absorption costing is ysed for external purposes,in marginal costing the fixed production overheads are not calculated as a product cost and in absorption costing the fixed prodution overheads are calculated as product cost.
A costing system that traces direct costs to a cost object by using the actual direct-cost rates times the actual quantities of the direct-cost inputs and that allocates indirect costs based on the budgeted indirect-cost rates times the actual quantities of the cost-allocation bases.
marginal costing considers only direct) materials,labour,expenses and variable factory overheads excluding fixed factory overheads but absorption considers (direct) materials ,labour,expenses,variable and fixed factory overheads.
There are two type of costing are involved in a product or service. ie Direct cost and Indirect cost. In this two head there are two sub type costing are involved. ie Varriable cost and Fixed cost. Here the the total varriable cost are involved in a product of cost is called marginal costing. In another way the totoal cost -fixed cost is called marginal costing By M.Magesh 099948 33079