Total absorption costing

Total absorption costing (TAC) is a method of Accounting cost which entails the full cost of manufacturing or providing a service. TAC includes not just the costs of materials and labour, but also of all manufacturing overheads (whether ‘fixed’ or ‘variable’).The cost of each cost center can be direct or indirect cost. The direct cost can be easily identified with individual cost centers. whereas the indirect cost can't be easily identified with the cost center. The distribution of overhead among the departments is called apportionment.