Management will use both variable and absorption costing in all of the following activities except
A)controlling costs
B)product pricing
C)production planning
D)controlling inventory levels

Question

Quizplus · Accepted Answer

Variable costing is used for internal management decisions such as controlling costs, product pricing, and production planning. Absorption costing is required for external financial reporting. Controlling inventory levels is not an activity where the choice between variable and absorption costing is relevant, as inventory levels are managed based on physical units and the flow of goods rather than the costing method applied.

Management Will Use Both Variable and Absorption Costing in All