Cost accounting

Dear Krina,

Your 2nd query is reply of 1st query.

To produce goods or to provide services, manufacture/ service provider needs Input (rawmaterial or input services) which obviously cost manufacfturer.

Now,  while selling the finished goods produced using input purchased above, the cost of input is absorbed as cost of production i.e., from finished goods cost is recovered.

SHILPA

thanks for ur relpy ...

absorption of  costs means distribution of costs