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cwang1026
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| Posted: 26 Jan 2012 at 03:08 | IP Logged
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hello,
does variable cost include variable general selling and admin expense when calculating contribution margin?
i know that variable SGA is NOT included when calculating the variable costing method (as opposed to the absorption cost method)
can anyone confirm?
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jl0329
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| Posted: 27 Jan 2012 at 14:58 | IP Logged
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CM = Sales - total VC
Total VC should include all the variable VC, even the
variable SGAs.
That's my understanding. SGA is divided into fixed and
variable as well.
Can somebody else confirm?
What do you mean variable SGA is not included when using
direct costing? You are talking about the calculation of
inventory right? (as opposed to CM)
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cwang1026
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| Posted: 28 Jan 2012 at 11:02 | IP Logged
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Hi jl0329,
Thanks for the reply, but yes I mean that variable sga is not included in
the calculation of variable costing method for inventory valuation.
I just took the exam yesterday and good thing I was able to distinguish
among the two. :D
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Topic: variable cost
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