Different Profits calculate the cost of production of a company the most visible difference between the two is that the full costing method uses fixed and variable factory overhead expenses. includes variable overhead expenses. Factory overhead costs are production costs that are not included in raw materials and direct labor costs.Fixed factory overhead expenses are costs that do not change even though there are changes in production volume.
An example of fixed factory overhead costs is the costs incurred by South Sudan Email List a company to purchase new equipment. Meanwhile variable factory overhead costs are factory overhead costs that change in proportion to the volume of activity. One example of variable factory overhead expenses is the expense of packaging products. Financial Reports in the Profit and Loss.
Statement So what about the financial reports If you use the full costing method overhead costs will be reported if the product has been sold. method whether the product is sold or not overhead costs will still be reported so that the companys income will still decrease. Costs Per Period In the full costing method costs per period are considered as costs that are not related to production costs but still reduce the companys profits.