Absorption costing uses sales less variable costs to measure the contribution to profit.

Name: Absorption costing uses sales less variable costs to measure the contribution to profit.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Absorption costing includes both variable and fixed manufacturing costs in the cost of a product, not just variable costs. It does not measure contribution to profit by sales less variable costs; that method is more aligned with variable or direct costing.

Absorption Costing Uses Sales Less Variable Costs to Measure the Contribution