When determining the product costs for long-term 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 distribution expenses should be ignored

Question

Quizplus · Accepted Answer

Absorption costing is more appropriate when determining the product costs for long-term planning as it includes all manufacturing costs, both fixed and variable, in the cost of the product. This provides a more accurate picture of the true cost of the product and is important for long-term planning and decision making. Ignoring research and development costs or selling and distribution expenses may result in underestimating the true cost of the product and lead to poor decision making. Variable costing, on the other hand, only considers the variable manufacturing costs and does not provide a complete picture of the total cost of the product.

When Determining the Product Costs for Long-Term Planning ________