Consider the following statements about absorption costing and variable costing: I.Variable costing is consistent with contribution reporting and cost-volume-proﬁt analysis. II.Absorption costing must be used for external ﬁnancial reporting. III.A number of companies use both absorption costing and variable costing. Which of the above statements is (are) true?
A)I only.
B)II only.
C)III only.
D)I and II.
E)I, II, and III.

Question

Quizplus · Accepted Answer

Variable costing aligns with contribution margin and CVP analysis, absorption costing is required for external reporting, and many companies use both methods for different purposes.

Consider the Following Statements About Absorption Costing and Variable Costing