IDLE-CAPACITY COSTS IN ABC ABSORPTION AND DIRECT-COSTING INCOME STATEMENTS

摘要

Baxendale-Foster proposes an income statement based on ABC costing that shows absorption-costing net income, direct-costing net income, a reconciliation, and shows idle-capacity costs in manufacturing by activity. From a cost-accounting perspective, forms of income statement presentation are not important, but isolating idle-capacity costs is important. Showing idle-capacity costs separately from the other costs of producing goods is a recommendation of John M. Clark's 1923 classic, Economics of Overhead Costs.