All of the following are examples of drawbacks of using absorption costing EXCEPT:
A)management has the ability to manipulate operating income via production schedules
B)manipulation of operating income may ultimately increase the company's costs incurred over the long run
C)operating income solely reflects income from the sale of units and excludes the effects of manipulating production schedules
D)decreasing maintenance activities and increasing production result in increased operating income

Question

Quizplus · Accepted Answer

This statement is actually false. Absorption costing takes into account fixed manufacturing overhead costs and allocates them to units produced, which means it does not solely focus on income from the sale of units. The other options are all potential drawbacks of using absorption costing.

All of the Following Are Examples of Drawbacks of Using