Discuss into details the implications of absorption and variable costing on net income, product cost and cost volume profit analysis. The absorption of fixed overhead costs as part of the cost of inventory on the balance sheet presents ethical challenges. In what way? HINT: Defineabsorption and variable costing. Absorption or variable costing. Which one would recommend to a company in a service industry. Why? Please provide references!

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Absorption costing and variable costing are two different approaches used by companies to allocate fixed overhead costs to products Lets delve into each and then discuss their implications on net inco... View the full answer