A customer wants to purchase a large quantity of your product at a price below your normal selling price.You have a labour-intensive production process.Which of the following would be most helpful in assessing the offer?
A)throughput costing
B)either variable or absorption costing
C)absorption costing
D)variable costing

Question

Quizplus · Accepted Answer

Variable costing would be the most helpful in assessing the offer as it separates the fixed and variable costs. This would give a better understanding of the actual cost of production and help in determining if the offer is feasible or not. Throughput costing and absorption costing would include fixed costs in the production cost, which may not accurately reflect the actual cost of producing the additional units.

A Customer Wants to Purchase a Large Quantity of Your