When determining the product costs for long-term production planning,________.
A)the research and development cost of the product should be ignored
B)variable costing is more appropriate
C)absorption costing is more appropriate
D)the selling and administrative expenses should be ignored

Question

Quizplus · Accepted Answer

Absorption costing is more appropriate when determining the product costs for long-term production planning as it takes into account both fixed and variable costs, including overhead expenses. The research and development cost of the product should be included in the product costs, and selling and administrative expenses should also be taken into consideration as they contribute to the overall cost of producing the product. Variable costing may not accurately reflect the true cost of production in the long term as it only considers variable costs.

When Determining the Product Costs for Long-Term Production Planning,________