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 both relevant for manufacturing firms. They are used to determine the cost of goods sold and ending inventory. Not-for-profit companies, governmental units, and service firms do not typically have inventory and thus do not utilize these costing methods for inventory valuation.

Variable Costing of Inventory and Absorption Costing of Inventory Is