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compare absorption costing and process costing

compare absorption costing and process costing

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Absorption Costing: Absorption costing is a method of costing in which all cost is divided into variable and fixed cost. And both cost are included in calculation of product cost. It is also known as full costing method. Absorption costing means that all the manufacturing cost is absorbed by the units manufactured during the period.

Process Costing: Process Costing is a technique in costing which is used when products are manufactured through process. At each stage output of one stage becomes the input of next stage. It helps to calculate the cost at the end of each process .

Process costing is a type of Absorption costing.

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