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In this lesson, we look at both absorption costing and marginal costing. We explain what absorption costing is, what marginal costing is, and go through a thorough example on how to calculate net profit using both the absorption costing and marginal costing.
In looking at absorption costing, we explain and go through some examples on over and under absorption of fixed production overheads.
We also look at arguments in favor of both absorption costing and marginal costing.
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