All of the following statements regarding manufacturing costs are true except:
A)Direct material costs that increase with production are called variable costs.
B)The reporting of fixed and variable costs separately is not helpful to managers in analyzing cost behavior.
C)When overhead costs vary with production, they are called variable costs.
D)When overhead costs don't vary with production, they are called fixed overhead.
E)Overhead can be both variable and fixed.

Question

Quizplus · Accepted Answer

The statement "The reporting of fixed and variable costs separately is not helpful to managers in analyzing cost behavior" is not true. Separating fixed and variable costs is helpful to managers in determining the cost behavior of a business and making informed decisions about pricing, production levels, and profitability.

All of the Following Statements Regarding Manufacturing Costs Are True