Variable costs are charged to cost units and the fixed costs attributable in the period being considered are written off in full against the contribution for that period.

see full absorption costing.

Determination of incremental cost and hence trade-off value of additional material for performance or safety, additional labor for faster progress, and so on. It is used where unit cost s are not appropriate because some cost s such as rental or overhead s are already in place. Some adjustment must be made for reduction in productivity due to work transfer or for divided responsibility, for example, following introduction of a second shift on the same activity. [D03070] CCCP