Absorption Costing
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- Опубліковано 4 жов 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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I don't even know why I go to University when this free resource is 100x better than anything they have to offer. God bless you Sir.
Thank you!
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I feel the same way
I also feel the same way like why do they complicate stuff, smh.
You need the certificate bruh.. Just knowing this stuff won't benefit you. You need the certificate too
I wish you were my professor. Mine just mumbles and scribbles on the board. I never know whats going on in class, if it weren't for this channel I wouldn't be passing. Thank you for taking the time to make these videos.
+Grace Bunting It's my pleasure. Thanks for making me laugh and bringing a smile to my face!
same here. Mine just read the notes... Basically no one knew what is going on and we need to prepare for the exam.
As for the scribbling part....that's when I just decide to sleep during lectures
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I just passed a CPA exam thanks to these videos! Keep up the great work.
+dorororo Congratulations! The CPA exam is a difficult test, so clearly you put in a lot of hard work and studying. I wish you all the best and hope you have an excellent career!
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Congratulations 🥳
Congrats!
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.
Shut the fuck up
@@joshuavickers9820 depressed today aren't we
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.
i don't think i would have passed if it weren't for you! thank you very much for making these videos.
No problem, congratulations on passing the course!
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!
Your videos just saved me from failing my finance and accounting exams. THANK YOU!!!
Glad to hear it. Congratulations on passing your classes!
Studying for CPA right now and your vids have been a great help. Thank you so much!
Best of luck!
Why should someone dislike this great educative video? Thanks for passing out knowledge...Nice video
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have a managerial accounting exam in 6 hours and im only passing because of you . THANK YOU SO MUCH
good luck
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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!
You are epitome of perfection in every sense. I can't be more thankful to you!
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I am studying with regent business school this video is very helpful. You are the best teacher thank you so much sir.
Thank you for clearing up this method of costing, excellent presentation!
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.
Thank you very much for this video. Im studying for the CPA exam and your video has been of great help. Please keep posting more videos.
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 are just absolutely clear and good at explaining! keep on and thank u!
You're very welcome!
Thanks so much. This was very helpful to understand the method. I especially appreciated the last few minutes where it all came together!
I really appreciate your simplicity. why aren't you my professor
9 years later n this dude is still cooking
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!
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This helped me out significantly. Nice and clear compared to my actual teacher. Good work!
One Word: Excellent.
Thank you sir! Best wishes
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Thanks for the confidence booster!
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 :/
Very helpful for ACCA preparation!
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!
My professor literally can't even teach. How hard is it to give us some examples like this video.
give that man a bell
simple and precise explanation. great work. thanks
That is really a very clear explaining,
Thank you!
great video! thank you !
Terrific explanation, sir. Thank you!
You are the best! God bless you
Thank you!
Better than my uni lecturer
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!
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..!
Oooh perfect,now i know that why absorption costing profit increases when their is increase in production.
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!
This video was a great tool to understand the concept, thank you so much!
the way yu teach is amazing.... plz continue to make videos tnx..
Thank you!
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 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).
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 ?
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 ♥️
Thank you
Welcome!
This is awesome!!!!
Sophie Wang 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.
Thanks
Thank you so much Edspira!
Thanks a lot. Your videos are of great help to me.
No problem! Best wishes :)
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?
Great explanation 😃
Thanks man. You can explain really well
A very good learning video...
Thank you sir!
Are traditional costing systems (job order and process costing) an example of absorption costing?
You, sir, are an absolute legend! Thank you! :)
Great video! Thanks for the help
No problem my friend
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.
thanks you so much,you take me to another step
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.
Really this was very helpful to me thanku sir👌🙂
Really, really good video! Thanks so much!!!!
Shouldn't VOH differ by the number of produced units while FOH remains the same regardless of the quantity of products?
thank you very much, these videos help so much.
Thank you very much sir. This helped me a lot.
Thanks Professor. Your super helpful!!!!!!!!!!!!!!!!!!
Are these videos suitable for me to watch if I study AS levels or Alevels?
Dear Friends,
I have a question:
I want to setup Absorption costing of a product in year 2020. Next, I want to compare actual costing and Absorption costing in this product by month, year. How do I setup?.
This is very helpful. Thank you
Thanks man, really helped me a lot.
I hv a question here..pls help me to clarify.. in absorption costing the FOH is treated as part of COGS-production cost…if so why in 2nd quarter didnt tk up 20 units of making but just 10 ?thanks in advance
Very good, thanks
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!
If it distorts the actual financial health of the company, why Absorption costing required for external reporting (And not Variable costing)?
Brilliant!
Thanks!
you did not take into consideration the closing inventory of Q2 the number made was not all sold
trust me u r god gifted. Thank u sir :)
Thank you so much!!
perfect same as alwayssss
Thank you! I love your videos!