Absorption Versus Variable Costing

Assignment 1: Discussion—Absorption versus Variable Costing

There are several ways a company can allocate overhead costs to products produced or services provided. Two of these methods are absorption costing and variable costing. This assignment will allow you to explore the two methods of costing and compare/contrast the different uses of each costing system.

Using the module readings and the Argosy University online library resources, research absorption and variable costing. Use your research and/or your experiences as a working professional to complete this assignment.

Respond to the following:

  • Explain the differences between absorption costing and variable costing.
  • Explain, with the help of an example, how a company could use a variable costing system, as well as an absorption costing system. You have the option of using the company you work for as an example.
  • Explain which method is better for the company being discussed.

By the due date assigned, post your response to the Discussion AreaThroughthe end of the module, review and comment on at least two peers’ responses.

Write your initial response in 300–500 words. Your response should be thorough and address all components of the discussion question in detail, include citations of all sources, where needed, according to the APA Style, and demonstrate accurate spelling, grammar, and punctuation

Do the following when responding to your peers:

  • Read your peers’ answers.
  • Provide substantive comments by
    • contributing new, relevant information from course readings, Web sites, or other sources;
    • building on the remarks or questions of others; or
    • sharing practical examples of key concepts from your professional or personal experiences
  • Respond to feedback on your posting and provide feedback to other students on their ideas.
  • Make sure your writing
    • is clear, concise, and organized;
    • demonstrates ethical scholarship in accurate representation and attribution of sources; and
    • displays accurate spelling, grammar, and punctuation.

Grading Criteria

Grading CriteriaMaximum PointsQuality of initial posting, including fulfillment of assignment instructions16Quality of responses to classmates12Frequency of responses to classmates4Reference to supporting readings and other materials4Language and grammar4Total:40

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