Which of the following is not a potential advantage of variable costing relative to absorption costing? Net income calculated under variable costing is not closely tied to changes in sales levels. Net income calculated under variable costing is unaffected by changes in production levels. It is easier to understand the impact of fixed and variable costs on the computation of net income when variable costing is used. The use of variable costing is consistent with cost-volume-profit analysis

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: Operating profit is affected by changes in production under both the variable costing and absorption…

A: Operating profit is profit earned by the company from its primary or core purpose of the business.…

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: Under variable costing, how is it possible to increase net operating income without increasing sales

A: Introduction:- Under the Variable costing includes only variable manufacturing costs such as  direct…

Q: The following data were provided by Rider, Inc, which produces a single product that it sells for…

A: Absorption costing is that costing system under which product costs includes all manufacturing costs…

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: Calculation of profit change from changes in sales price, sales volume, variable costs, or fixed…

A: This question deals with profit change from changes in sales price, sales volume, variable costs, or…

Q: CVP analysis

A: Option "b" is wrong because the statement is true. The purpose of CVP analysis is to study the…

Q: Show the effects oncontribution margin of changesin variable costs, fixed costs,selling price, and…

A: Cost-Volume-Profit (CVP) Analysis: It is a method followed to analyze the relationship between the…

Q: Which of the following statements is false ? a. Volume-based costing has typically resulted in…

A: There are two methods of costing that are in place generally. One is volume based costing and other…

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: Explain why there is a difference in the operating profit and operating income under the two methods…

A: The product cost in an absorption costing method includes all variable and fixed production…

Q: TRUE OR FALSE When absorption costing is used for external reporting, variable costing can still be…

A: There are various approaches which can be prepared for reporting purpose. Two of which are variable…

Q: Is this statement true or false? Can you please explain in detail. There is a difference between…

A: Firstly let us understand what is the theoretical production capacity is the optimum production…

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: TRUE OR FALSE Net income under variable costing is unaffected by changes in production levels.

A: in variable costing fixed manufacturing overhead are exclude from the cost of production

Q: What could be the reason for which you can have different income figures in absorption costing and…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

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: Below is the information on a project that you are evaluating for deciding on its worthiness as an…

A: The question is related sensitivity Anaysis. The details are given

Q: Is there any way to show high net operating income without increasing sales under the absorption…

A: A method of costing that involves consideration of all the manufacturing costs for calculation of…

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

A:

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: Includes gross profit on the income statement. Absorption costing only Generally provides the most…

A: Introduction: Income statement: All incomes and expenses are shown in income statement. It tells the…

Q: Cost-volume-profit analysis is used for ________. analyzing the effects of changes in costs on…

A: Cost volume profit analysis is designed for profit forecasting at varying levels of sale volume and…

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 of the following statements is true? O a. Activity-based costs per unit are always greater…

A: The volume based costing represents the cost allocation to a single cost pool. The high volume…

Q: Which of the following line items will not be found in the absorption costing income statement?…

A: The objective of the question is to identify which line item among the given options will not be…

Q: Which of the following statement is correct?   A In a variable costing income statement, sales…

A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…

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: The simplifying assumption that costs and volume vary in straight-line relationships makes the…

A: Cost Volume Profit Analysis is a method of costing that has an impact on the varying levels of cost…

Q: What concept relates to the proportionate savings in costs gained when levels of production are…

A: Lets understand the meaning of all the terms given in the question. Accounting profit is a terms…

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…

Q: Explain how absorption costing can enable a manager to increase production solely for the purpose of…

A: Absorption costing is also known as ‘Full costing’ which means, all types of costs incurred during…