Absorption Costing
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- Опубликовано: 6 окт 2024
- This video explains the concept of Absorption Costing in Managerial Accounting. A comprehensive example is provided to explain how absorption costing is used to calculate per unit product costs as well as to create an absorption costing income statement. The video also contrasts the absorption costing method with the variable cost method and discusses how the use of absorption costing can lead to distorted measures of profitability and perverse managerial incentives.
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Sir, you are naturally gifted. I wish you are the guy who stands in from of our class.Your explanation is simply and clearly magnificent .you deserve to be called a professor.thank you for the sensational job.You really gave me correct foundation under this topic.thank you so much, professor.
As someone who struggles reading through text books for hours, your videos are a god send. Thank you so much!
Wow, thank you!
Same here (after 2 years tho. lol)
This is by far one of my favorite videos from the channel. It made absorption costing more understandable. For anyone out there, this entire channel covers practically both the finance and managerial accounting courses in most MBA programs.
I am an MBA student, and this is amazing. I am also a teacher, and I feel like I am in the driver's seat in this course. I love your teaching approach.
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Thank you for saving my life for my accounting exam. I don't know how, but my professors have a gift for making everything seem SO difficult, whereas when you explain it, it seems very straightforward.
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Glad to hear it. Congratulations on passing your classes!
These videos are incredible. Presented as timely, and informative as possible. These videos have absolutely given me at least, a 50% better chance along with studying my book to do well on my finals. I'm so very thankful! They enable my book to make sense to me! Double WOW !!!
Robert,
I really appreciate all your comments. Positive comments like yours keeps me motivated to continue putting out more videos. Best of luck to you on your managerial accounting final!
Yes, i to am cursed with a bad teacher. But, my teacher shouts bad English (she is from China)
Edspira takes something I would study in a book for a while and just makes it so simple to picture and apply in your head. love everything you do and have done sir
Thank you for the kind words!
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No problem, congratulations on passing the course!
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I have the worst instructure; he only reads the slides and he will ask question without giving us a chance to answer because he always answers them. I am so delighted I found this video.
Mamoun,
I'm glad you liked the video. I have more managerial accounting videos for free on my website if you need any additional instruction: edspira.com/courses/managerial-accounting Good Luck in your class!
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No problem. I hope you pass the CPA exam on your first try and go on to have an excellent career!
Thanks very much for the video...it explains more clear than our text book and our lecture as well....wish my lecture could be like this...many many thanks
Thanks Gregory! I have many managerial accounting videos if you you'd like to check them out. All of them are free of charge. Best of luck to you in your studies! www.edspira.com/courses/managerial-accounting
You just make things so easy to understand that appears so complex when my professor teaches.. Please keep up this great work. God bless you with more success.
you are just absolutely clear and good at explaining! keep on and thank u!
You're very welcome!
Very well explained thank you very much. Much better than the long lengthy difficult to understand book.
Thank you for your videos! It's really helpful and I recommend it to all my uni friends :)
Thank you for the encouragement and support!
I really appreciate your simplicity. why aren't you my professor
Thank you for clearing up this method of costing, excellent presentation!
Thanks so much. This was very helpful to understand the method. I especially appreciated the last few minutes where it all came together!
you definitely are heaven sent sir! I'm really glad you take time and effort in your videos. you are helping a lot of students. Especially me, CPA in transit. :D thank you!
thank u so much for making such kind of video!!! really appreciate your efforts
New Business Controller at my new job. They are using Absorption Costing, which my old job never did - we only just variable costing. This firm moved from variable to Abs costing five years back due to new management. I´ve only seen disadvantages with this method, and frankly was kinda hoping that you could shed some light onto it. Why are companies using it for other reasons that "well everybody else is using it for external sales"? There must be something good with it....I hope :/
This helped me out significantly. Nice and clear compared to my actual teacher. Good work!
I just did an essay on this and even though my predicted grades are great I'm still unable to understand what the difference between the two is. This vid is amazing.
Thanks!
Great explanation sir TQ for this..
It helps alot for my preparation for cma final 👏🙏
- Anil from INDIA
Good luck on the CMA!
THANKS FOR YOUR CLASS . LEARN A LOT .
云生活云朵快报 My pleasure, thank you!!
One Word: Excellent.
Thank you sir! Best wishes
My professor literally can't even teach. How hard is it to give us some examples like this video.
best accounting professor ever!!
Thanks for the confidence booster!
Very helpful for ACCA preparation!
It's really helpful sir
Love and respect from jalalabad Afghanistan
Thanks! I'm always surprised at how many different countries watch these videos. Hello to Afghanistan!
9 years later n this dude is still cooking
the way yu teach is amazing.... plz continue to make videos tnx..
Thank you!
simple and precise explanation. great work. thanks
That is really a very clear explaining,
Thank you!
Terrific explanation, sir. Thank you!
Thank you for this! I'm trying to defend Absorption Costing for our debate.
+Elidesa Cajeles (5sosfifthhero) Thank you and good luck with the debate!
+Education Unlocked really nice for studying online...looking forward for more stuff..!
Your videos are so effective, you've helped me out so much. Thank you!
Thanks, and good luck in your studies!
Thanks for the brief introduction sir, God bless you ♥️
This video was a great tool to understand the concept, thank you so much!
Oooh perfect,now i know that why absorption costing profit increases when their is increase in production.
great video! thank you !
Quarter 2 is better than quarter one because there is a decrease in production cost (Fixed Overhead Cost) as a result of an increase in units produced. That's my opinion, but please correct me if am wrong. Thank you
but you have a lot of inventory, and perhaps they wont be sold next quarter. Higher risk, but besides that yes. Better.
In paper looks better, But as in the video said, you are putting that Fixed OH Cost into you products sitting in inventory, What good makes to your firm having that cost in your inventory. If you sell those products in inventory next quarter then your net income will be reduced, because you are bringing those costs already incurred to the next quarter (you defer them) or worse, that product gets damaged or expired so, now you can not sell them, you will lose the DM, DL, VOH and FOH costs you allocated per product, so it will hurt even more the finances of the company.
You are the best! God bless you
Thank you!
Thanks a lot. Your videos are of great help to me.
No problem! Best wishes :)
Thanks man. You can explain really well
Thanks for video learnings like this. ☺ God Bless 💖
If I understand correctly, under Abs Costing, CGS is calculated both on Units Sold (DM+DL+MO) and Fixed MO divided by units produced? Whereas sales is only calculated on units sold. (referring to 60000/20 in Q2, as this is the only place I see the 20 units referred to when calculating CGS).
give that man a bell
Thank you
Welcome!
Great explanation 😃
Thank you so much Edspira!
Really this was very helpful to me thanku sir👌🙂
Better than my uni lecturer
This is awesome!!!!
Sophie Wang Thank you!
Thank you very much sir. This helped me a lot.
Thanks
A very good learning video...
Thank you sir!
You, sir, are an absolute legend! Thank you! :)
thank you very much, these videos help so much.
Thank you sooooo much.
No problem. In the event you need more instruction on job order costing, I have 8 videos on this topic: edspira.com/lessons/job-order-costing
Thanks for watching!
Great video! Thanks for the help
No problem my friend
Really, really good video! Thanks so much!!!!
Hello Professor, I have some doubts.
1. if we made more products why is the sales same ?
2. If we made more products how is the material used same so how is the material cost same ?
3. If we made more product then machine hours will be more and labor hours too so how is that remains same?
All that affects absorption costing correct ?
thanks you so much,you take me to another step
COGS = beg inventory + production - end inventory, what is happening to the other 10 balloons, shouldn't they be included in the in Q2 COGS since we didn't sell them?
Thanks man, really helped me a lot.
This is very helpful. Thank you
trust me u r god gifted. Thank u sir :)
Thanks Professor. Your super helpful!!!!!!!!!!!!!!!!!!
Just wanted to let you know that this video isn't part of your Managerial Accounting playlist, made things a bit confusing until I realized there was a video missing
Aaron, thanks for making me aware of this! I'll update the playlist.
Are traditional costing systems (job order and process costing) an example of absorption costing?
Thank you! I love your videos!
u made it easy good i wish were my prof
Thank you!
Setting => playback speed => 1.75
Your welcome!
Very good, thanks
I’m just curious what happens under absorption costing to our income if for example we produce 20 balloons and sell 10 when we also have for example some sales commission and fixed administrative expenses because all the examples in the videos are simple.
Brilliant!
Thanks!
Excellent,
you did not take into consideration the closing inventory of Q2 the number made was not all sold
Dear Friends, I have a question:
1/ In the absorption costing system, I think the difference between Absorbed cost and full costing. Absored cost = direct material + direct labor + variable overhead manufacturing + fixed overhead manufacturing for a product or a brand or a product line. full cost= Absored cost + all corporate-related expenses for all product or all brand or all product line. Could you help?. Thank you.
hello, can u make a tutorial video on about adjustment in absorption costing. it's about the over and under absorption posting ( - / + ) . and what should we do if there is Fixed manufacturing cost under adjustment. should we ( + or - ) it. ? Tutorial video for this please. Thank you.
great video
+Farjad Mallick Thanks!