Variable Costing and Samanta Shoes Research Paper

Variable Costing and Samanta Shoes - Research Paper ExampleTransportation costs ar directly relative to production cost. Transportation of raw materials from one area will affect the enclothe price. Materials that are outsourced from remote locations will, therefore, make up the price of the brake shoe.Research and development costs are directly proportional to the production cost of shoes. Increased research and development will lead to higher shoe prices. Manufacturing of parvenue shoes based on intensive research will also lead to increased shoe prices.2. Founders decision making is mainly influenced by the variable costing method that is mainly affected by production levels. Variable costs are directly proportional to production levels. Absorption costing allows incomes to increase as production levels rise. Use of absorption costing by the management artificially inflates the incomes of the company (Horngren, Datar, & Rajan. p 45). Absorption costing in the period of produc tion depicts that fewer costs are incurred and more income for the