Absorption costing is required by GAAP (Generally Accepted Accounting Principles)for external reporting.

Name: Absorption costing is required by GAAP (Generally Accepted Accounting Principles)for external reporting.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

GAAP requires absorption costing for external reporting as it allocates all manufacturing costs, including fixed overhead costs, to products. This provides a more accurate picture of the total cost of production and helps in pricing decisions.

Absorption Costing Is Required by GAAP (Generally Accepted Accounting Principles)for