_____ is are) used for external reporting.
A)Absorption costing
B)Variable costing
C)Direct costing
D)Absorption costing and variable costing

Question

Quizplus · Accepted Answer

Absorption costing is used for external reporting because it includes all manufacturing costs (both fixed and variable) in the cost of a product, which is a requirement under generally accepted accounting principles (GAAP). Variable or direct costing, which excludes fixed manufacturing overhead from product costs, is not typically used for external financial reporting.

_____ Is Are) Used for External Reporting