The distinction between absorption costing and variable costing is most important for which type of industry?
A)manufacturing
B)marketing
C)retail
D)service
E)educational

Question

Quizplus · Accepted Answer

The distinction between absorption costing and variable costing is most important for manufacturing industries, as they have to account for fixed manufacturing overhead costs that are incurred regardless of the number of units produced. Absorption costing allocates these fixed costs to each unit produced, while variable costing only considers variable costs directly related to the production of each unit. This can have a significant impact on the reported profit of a manufacturing company.

The Distinction Between Absorption Costing and Variable Costing Is Most