Which of the following is an advantage of using variable costing? * a. Variable costing complies with the Philippine NIRC. b. Variable costing complies with generally accepted accounting principles. c. Variable costing

Which of the following is an advantage of using variable costing? * a. Variable costing complies with the Philippine NIRC. b. Variable costing complies with generally accepted accounting principles. c. Variable costing

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: explain why GAAP requires full absorption costing (instead of variable costing) if absorption…

A: Introduction:- i)Absorption costing:- Under the absorption costing, The following costs included in…

Q: What type of cost drivers do modern costing systems use and how does it differ from the cost drivers…

A: Cost Driver Business activities are influenced by a cost driver . Cost drivers are the factors…

Q: nother cost-based approach to pricing is called time and material pricing. Under this approach, two…

A: Answer: Some companies--partiicularly in service industries-- use a variiation of cost and pricing…

Q: When absorption costing is used a. management may be tempted to overproduce in a given period in…

A: Absorption costing is a method of calculating the cost of a product or enterprise by taking into…

Q: What is the difference between absorption costing and variable costing? 2. Distinguish between…

A: Cost accounting: It is a part of managerial accounting and is used to record total cost of…

Q: When should a company use absorption costing when setting sales prices? When should it use variable…

A: Variable Costing: "Variable costing is a method that allocates only variable manufacturing costs to…

Q: Cost-volume-profit analysis favors either variable costing or absorption costs. Why?

A: The CVP analysis is used to analyse the impact of changes in variable cost and fixed cost on net…

Q: What is a good response to this post? Being that the big difference between the two margins is…

A: POST:Being that the big difference between the two margins is mostly in fixed costs, this plays a…

Q: Define incremental cost, opportunity cost, and sunk cost. How do these costs impact decision-making?…

A: Incremental Cost: Incremental cost is the additional cost incurred to produce one additional…

Q: The objective of management, under absorption costing, is that each product recovers its full cost…

A: Absorption costing is the method used by the managers to determine the cost connected with the…

Q: 2) Many firms have decided to use marginal costing to prepare the income statement. Please briefly…

A: Marginal Costing is a costing technique wherein the marginal cost, i.e. variable cost is charged to…

Q: Differentiate between the adoption of “Variable costing” and “absorption costing” in business.

A: Variable costing and absorption costing are the two different costing systems used by the business.…

Q: Cost calculation

A: Cost is the amount incurred in production of product, carrying out a process, conduct of sales or…

Q: Why do proponents of variable costing prefer variable costing when making pricing decisions?

A: Definition: Variable costing: It refers to the method of product costing in which the price of the…

Q: When compared to the traditional costing system, an advantage of ABC is that it is inexpensive to…

A: A costing system, also known as a cost account system, is a system or frame used by associations…

Q: When will NOI under the variable costing method show higher income than under the absorption costing

A: Net Operating Income: It is a calculation used to assess the profitability of the business.

Q: Which costing system is helpful for internal managers when they're trying to make a short- term…

A: Cost Accounting is a process of identification, classification, measurement, and assignment of costs…

Q: 1. Which of the following is a disadvantage of the Variable Costing method? A. The data available…

A: A cost accounting technique known as "variable costing" treats fixed manufacturing costs as period…

Q: Firms may choose to use absorption costing or variable costing for external financial reporting…

A: Absorption costing: Absorption costing includes all manufacturing costs, both variable and fixed, in…

Q: Please define and give formula of the following (if there is any): 1. Absorption costing 2. Activity…

A: "Hey, since there are multiple questions posted, we will answer the first question. If you want any…

Q: In making a short-term special decision, which of the following is MOST important? a. Use a…

A: Solution Concept The decision that is to be taken differs from one another on the basis of the time…

Q: Which of the following is true of hybrid transfer prices? A. The cost used in hybrid transfer prices…

A: Transfer price refers to the price at which related parties sell and purchase the goods. These…

Q: Discuss the different situations for when Traditional Absorption Costing and Relevant costing would…

A: The traditional absorption costing is useful to estimate the cost of production that include direct…

Q: It known that variable costing should be used for pricing purposes. What is the benefit of using…

A: There are mainly two types of Costing systems that are variable costing and absorption costing.…

Q: In your own words, explain what differential costs mean. How are fixed costs and variable costs…

A: The cost can be classified on the basis of nature variable or fixed. The variable cost are directly…

Q: Product costs under variable costing are typically: Group of answer choices A. higher than under…

Q: Product costs under variable costing are typically: Question 1 options: lower than under…

A: As per the variable costing method, only variable cost is considered as the product cost while in…

Q: Based on below, Activity-Based Costing and Analysis Cost Behavior and Cost-Volume-Profit Analysis…

A: Under cost-profit volume analysis, the break-even point is that level of production where the…

Q: Google uses variable costing for several business decisions. How can variable costing income be…

Q: Target costing is reversal of: a. Skimming pricing b. Marginal cost c. Penetrating pricing d. Cost…

A: Solution: Target costing is reversal of "cost plus model". This is because under target costing,…

Q: in which cases is it preferable to prepare the income statement based on marginal costing? Justify…

A: Income statement refers to the statement which is being prepared by the business in order to…

Q: Which among the following is not true about traditional costing system? a. This method allocates…

A: Traditional costing is allocating the factory overhead to products based on the volume of the…

Q: Which of the following is not a potential advantage of variable costing relative absorption costing?…

A: Cost volume profit analysis is calculated by dividing the fixed cost by the unit contribution…

Question

Which of the following is an advantage of using variable costing? *

a. Variable costing complies with the Philippine NIRC.

b. Variable costing complies with generally accepted accounting principles.

c. Variable costing makes cost-volume relationships more easily apparent.

d. Variable costing is most relevant to long-run pricing strategies.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Which is typically not considered a crucial cost driver: 1. Marketing intensity 2. Capacity utilization 3. Scale economies 4.Production technologies 5. Input costs
if we produce goods over the capacity, should we consider the fixed marketing cost and variable marketing cost when making the decision to accept or reject a special offer?
Which of the following is a correct statement? O A. the fixed manufacturing cost is based on a per unit cost, when using Variable Costing O B. the fixed manufacturing cost is based on a per unit cost, when using Absorption Costing and a total cost, when using Variable Costing Oc the variable manufacturing cost is shown as a total cost in both Variable Costing and Absorption Costing O D. the fixed manufacturing cost is always shown as a total cost, when using Absorption Costing
Which of the following statements regarding marginal costing is incorrect? Select one: O A. It is useful long-term planning technique OB. It assumes that fixed costs remain fixed over relevant activity ranges O C. It assumes that variable costs vary in proportion to activity O D. It assumes that costs can be classified as variable or fixed
Can someone help by providing an example of revenues and costs that would be impacted by outsourcing decision using ration analysis?
Briefly explain the potential negative consequences in pricing decisions from using a traditional, volumebased product-costing system.
Cost-volume-profit analysis is used to make many decisions, including product pricing and controlling costs. What are the limitations of using operating leverage to predict profitability?
Question One Describe the following costing systems: Marginal and Absorption costing Explains the effect on profit of using variable (marginal) and absorption costing. Explain TWO advantages and TWO disadvantages of both marginal and absorption costing systems.
Decisions where relevant cost analysis might be used effective is Sell or process decisions. Explain IN YOUR OWN WORDS what "sell or process decision" is AND MUST USE EXAMPLES IN YOUR DESCRIPTION.