What is a disadvantage of absorption costing?
A)It is not a useful format for decision making.
B)It encourages the dumping of inventory.
C)It reports a lower net income when production is less than sales.
D)It is difficult to gather the fixed and variable costing information.

Question

Quizplus · Accepted Answer

Absorption costing can obscure the true cost of production, making it less useful for decision-making compared to variable costing, which separates fixed and variable costs.

What Is a Disadvantage of Absorption Costing