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Costing

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(Querist)
29 August 2011 What is the difference between absorption costing and marginal costing ?

Under what circumstances company uses absorption/ Marginal costing??



Thanking you.
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CMA Ramesh Krishnan

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CMA Ramesh Krishnan (Expert)
29 August 2011

when we allocate all manufacturing costs to products regardless of whether they are fixed or variable. This approach is known as absorption costing/full costing

However, only variable costs are relevant to decision-making. This is known as marginal costing/variable costing

There is no specific circumstances define for using those costing, you can use all the circumstances both costing provided the information are available
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