Provide a 9 pages analysis while answering the following question: Cost Control and Performance Management. Prepare this assignment according to the guidelines found in the APA Style Guide. An abstrac

Provide a 9 pages analysis while answering the following question: Cost Control and Performance Management. Prepare this assignment according to the guidelines found in the APA Style Guide. An abstract is required. This is known as the absorption method. When costing is done in this method then, all costs are treated as the cost of production. This is done regardless of whether they are variable or fixed costs. The costing method allocates part of the fixed manufacturing overhead cost to every single unit of production. The same is done with the variable manufacturing costs. (Wolk, Porter, Gerber, 1988)

When it comes to the variable costing it is a bit different from fixed costing. When the variable costing method is used, then all the costs which change according to production are treated as product costs. All this includes direct costs of labor, material and cost of manufacturing overhead. While the fixed costs, which stay the same no matter what the production level is, are treated as the period costs. These costs are marked off against the revenue earned from the production. (Carter, 2005)

It is the system of accounting where the variable costs are put under units produced, while the fixed costs are put under the period they have been incurred. they are written off against the aggregate contribution. (Brown, 1999)

When talking about marginal costs, we basically mean the last unit produced. This is known as the marginal unit produced. So in terms of marginal costing, we calculate the cost of producing a marginal or additional unit, along with the present level of production. Marginal costing is a method of displaying data in terms of variable costs and fixed costs. This is done to help with the process of making managerial decisions. It is done purely for analyzing the information available of the costs of production. It helps the managers find the changes in the profit due to the changes in the output of production. (Nicholson, 2007)

For the anyone accounting period of a given firm, the fixed costs stay the same. They do not change with the change in production levels and sales.