Variable costing of inventory and absorption costing of inventory is relevant for which of the following types of businesses?
A) Manufacturing firms.
B) Not-for-profit companies.
C) Governmental units.
D) Service firms.
E) All of the answers are correct.

Question

Quizplus · Accepted Answer

Variable costing and absorption costing are relevant for manufacturing firms because these methods are used to account for production costs. Service firms, not-for-profit companies, and governmental units typically do not have inventory in the traditional sense that manufacturing firms do.

Variable Costing of Inventory and Absorption Costing of Inventory Is