The ________ method allows managers to manipulate operating profits through production.
A)absorption costing
B)variable costing
C)direct costing
D)marginal costing

Question

Quizplus · Accepted Answer

Absorption costing is a method of accounting that assigns all of the costs associated with manufacturing a product to the product itself. This includes direct and indirect costs such as labor, materials, and overhead. By manipulating the volume of production, managers can control the amount of overhead costs allocated to each unit, which affects the operating profits of the company. The other three methods listed (B) variable costing, (C) direct costing, and (D) marginal costing do not allow for this type of manipulation of operating profits through production.

The ________ Method Allows Managers to Manipulate Operating Profits Through