00:01
Okay, an analysis is done here between the variable in terms of the costing systems that can be used.
00:10
So we have a variable costing system.
00:13
So this basically variable costing.
00:18
And we have overhead absorption costing.
00:31
Okay, so the key here is to find out what makes the differences between, these two costing systems, we need to point out that the onset that we're not dealing with a variable costing analysis is basically to split the costs between fixed and variable, so that we understand that the behavior of the cost can really be defined as those that relate to the increase in production that will be considered variable.
01:08
So you actually have things such as a direct cost, direct labor, as well as direct material, being variable costs.
01:18
And for the overhead absorption, it's about actually trying to distribute the overhead costs among the different products.
01:25
So it is absorbing the different costs into where we have the main centers, the manufacturing centers.
01:38
And then you absorb the service centers into different products.
01:47
So that's basically the differences between the two.
01:50
Okay, so the question is what constitutes the difference? all right.
01:56
So this one was basically split between the production centers and the service centers.
02:08
So the service centers are absorbed into the production centers and then into the products.
02:15
So that's the analysis.
02:17
So the question is, what is their differences? the difference, we look at the first option that is given.
02:24
Is it where the selling and distribution and admin costs should be included in the product cost? absolutely not.
02:30
They are selling...