Definition of absorption costing in English:
A method of calculating the cost of a product or enterprise by taking into account indirect expenses (overheads) as well as direct costs.
- The argument for using absorption costing in external reports seems to be based on the matching principle.
- The ATO opinion was that full absorption costing was necessary for all retail and wholesale businesses.
- This is not to say that there is no role for absorption costing in business.
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