Question:Financial AccountWhich one of the following is anadvantage of using variable costing?a. Variable costing complies with the US Internal Revenue Code.b. Variable costing complies with generally accepted accountingprinciples.c. Variable costing makes cost-volume relationships more easilyapparent.d. Variable costing is most relevant to long-run pricing strategies.

The correct answer is:c. Variable costing makes cost-volume relationships more easily apparent.…

Answered: Question:Financial Account Which one of…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 7DQ: Discuss how financial data prepared on the basis of variable costing can assist management in the...

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Similar questions

1. Why are indirect costs not directly traced to cost objects in the same way as direct costs? 2. Define cost tracing, cost allocation, allocation base and cost driver. 3. Distinguish between arbitrary and cause-and-effect allocations. 4. Explain how cost information differs for profit measurement/inventory valuation requirements compared with decision-making requirements. 5. Explain why cost systems should differ in terms of their level of sophistication.
How important is it to trace costs appropriately? Explain. As you are beginning to think about the importance of tracing costs appropriately, please consider the differences between variable costing and absorption costing. What implications does each of these have on such things as financial reporting of profit and pricing your products for the marketplace?
Q: What is variable costing? How does it differ from absorpotion costing? Which can better be used to manipulate the income statement and how? Why would management do this?
Firms may choose to use absorption costing or variable costing for external financial reporting purposes. True or False True False
explain why GAAP requires full absorption costing (instead of variable costing) if absorption costing can be used to deceptively manipulate financial statements
What are these equations? c.Under absorption costing, what is the cost of goods sold? d.Under variable costing, what is the cost of goods sold? e.Under absorption costing, what is the operating income? f.Under variable costing, what is the operating income? g.Reconcile the difference in operating income under absorption costing versus variable costing.
Cost-volume-profit analysis is used to make many decisions, including product pricing and controlling costs. Are these assumptions always valid?
Marginal Costing is a technique of _____. a. Cost Reduction b. Cost Evaluation c. Cost Control d. Cost Measurement
Absorption costing is:A. a good way to value inventories for the balance sheet.B. used for external reporting purposes.C. less useful than variable costing for management decision making. D. A and B is correct E. A, B and C is correct
If an income statement is prepared as an internal report, under which of the following methods would the term gross margin most likely appear? Question 10 options: a) Both absorption costing and variable costing. b) Absorption costing but not variable costing. c) Variable costing but not absorption costing. d) Neither variable costing nor absorption costing
1. Activity based costing is likely a more advantageous costing methold versus traditonal costing, to facilliate which of the following type of analysis? a) analysis of service organization cost b) analysis of channel profitablity c) analysis of long term profitablity d) analysis for reduction selling price of all products? 2. A ___ is any factor that causes a change in the cost of an activity. a) activity based cost b) cost pool c) cost driver d) standard 3. Which of the following is no a basic cost category for indirect cost? a) inventory financing cost b) Volume related cost c) Product batch cost d) activity based cost
Why are there objections to using absorption costing when segment reports of profitability are being prepared?

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