A manager at a company that uses both variable costing and absorption costing methods can benefit from the different advantages of both.

Question

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A manager can use variable costing to focus on the direct costs of production and analyze the impact of changes in production volume on net income. On the other hand, absorption costing can assist the manager in understanding the full cost of production, including both fixed and variable costs, and help in setting product prices and budgets. Both methods have their advantages, and the manager can benefit from using them appropriately in different situations.

A Manager at a Company That Uses Both Variable Costing