Why is it appropriate to use variable costing when planning production in the short term?

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: Q.How do managers plan for variable overhead costs?

A: The cost which is dependent upon the level of output and changes if the level of output fluctuates…

Q: What risks exist in a production conversion cycle?

A: The following are some of the risks that exists in the conversion cycle:   Authorization of…

Q: Why is ABC usually considered more accurate than traditional costing methods?

A: Activity-based costing: It is a method that helps in finding the activities performed by a company…

Q: When units produced are less than units sold, how does operating income differ between variable…

A: Absorption Costing: "Absorption costing is a method that allocates "direct labor, direct materials,…

Q: Why do managers consider Direct Coasts to be more accurate than Indirect  Costs?  How do managers…

A: Direct costs are the costs which are directly identifiable in the manufacturing process.  Indirect…

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: What is the basic difference between absorption costing and variable costing?   What are the…

A: Product costs are those kinds of costs which is related to the procedure of production directly like…

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: Marginal costing can provide useful information for decision-making. However, there are limitations…

A: There are various limitations of marginal costing few of them are stated below.

Q: explain fixed and variable costs within a relevant range of production

A: The objective of this question is to understand the concepts of fixed and variable costs within a…

Q: What is different than traditional costing that uses a volume-based driver? Can you give me some…

A: There are many different types of costing methods, out of which the selection of costing method to…

Q: Why would someone use variable costing over absorption Costing ?

A: The variable costing method is the method that only includes the variable costing whereas,…

Q: Why is activity-based costing growing in popularity?

A: Unlike traditional method, the ABC costing method does not use the plant wide overhead rate, rather…

Q: Which do you think is more important for controlling fixed overhead costs: the spending variance or…

A: (This is not a subjective matter of opinion but rather is based on accounting principles and theory…

Q: What are the arguments for and against "backflush" costing?

A: Arguments for and against Backflush costing: Backflush costing system is that the method of…

Q: What is variable costing? How does it differ from absorpotion costing? Which can better be used to…

A: Variable Costing is a costing method where variable expenses change in proportion with production.…

Q: Why is absorption costing the method allowable for GAAP yet managers prefer variable costing

A: In variable costing only variable costs are included in the product cost. Fixed costs re considered…

Q: What real-world company do you think would use activity-based costing?  Why?

A: Activity-based costing is a method that is used to identify the activities in an entity and assigns…

Q: Critically evaluate the concept and application of marginal costing

A: Concept of marginal costing: Marginal cost is the difference between total costs increasing 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: Why do most companies use normal or standard costing? After all, actual costing gives the actual…

A: The standard costing is a costing system that is used to estimate the expenses of the production…

Q: activity-based costing systems have a tendency to distort product costs. True or False?

A: The overhead is applied to the production on the basis of predetermined overhead rate. The…

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: 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: In a drop or continue decision, only the variable costs identified with a product are relevant in a…

A: The given statement is true.

Q: Is there a benefit behind using either FIFO, LIFO, or the weighted average costing method?

A: Yes, there are benefits to using each of the three inventory costing methods - FIFO…

Q: How do the cost flows in backflush costing systems differ from those in traditional costing systems?

A:

Q: What are the expected cost takedown rates?

A: When a company offers new issues in the market, such as stocks or bonds, they appoint an…