Absorption Costing
From Wikireedia
Absorption or Full Costing What is it Provides the ability to generate the full costs for a product for valuation purposes by absorbing the cost of overheads through direct allocation or by some other means such as Direct labor Hours, Machine Hours, Square feet, personel
The process to generate Full Cost
See Standard Costing, Marginal (Contribution) Costing and ABC
Disadvantages
1. Not really possible to generate Customer Profitability Analysis because you are not distinguishing between he different selling costs of selling to different customers See ABC
