Advantages and Limitations of Variable Costing Homework Help
Know the advantages and limitations of variable costing with us
Trying to understand variable costing? Are you facing some trouble solving problems on it? Are you being unable to complete your assignment? Well, it is only natural. Variable costing is an important but difficult aspect of finance and even more so because it is variable. Students encounter problem calculating the cost or even, at times, identifying it. However, with the assistance of advantages and limitations of variable costing homework help, this can be resolved.
At helpmeinhomework.com, we help resolve such problems. We provide solutions to any problems that students may encounter while pursuing finance, among other disciplines. However, it is imperative to understand the basic definition and the benefits that variable costing has to progress further with the topic.
What is variable costing?
Variable costing is defined as the cost that changes in accordance to the production of outputs. When the production volume rises, so does variable costs and when it falls, even the variable costs fall. Some examples of variable costs include commissions, labor, direct materials and so on.
Advantages of variable costing
There are various advantages of variable costing. It is in order to understand this that the students opt for advantages and limitations of variable costing assignment help.
Want to understand what they are? Listed below are some of them:
- Variable costing is relatively an easy concept to understand and is applicable for budgetary control and standard costing.
- The profit calculated in this system is based on sales and not on production.
- It is essentially helpful as it assists the company to analyze sales and production and take decisions with respect to profit planning and cost control.
- The fixed cost is ably identified under variable costing on the income statement and is explicitly stated.
Limitations of variable costing
There are various limitations of variable costing. In order to understand that it is imperative for students to opt for advantages and limitations of variable costing homework help. Listed below are some such limitations of variable costing:
- Requires the fixed overhead manufacturing to be excluded from the inventories.
- This system is not sustainable for long term planning.
- It is difficult to divide overhead cost into fixed cost and variable cost.
- The profit fluctuates a lot.
- It cannot be accepted for external reports.
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