Variable costing is also called ________.
A) functional costing
B) indirect costing
C) absorption costing
D) the contribution approach

Question

Quizplus · Accepted Answer

Variable costing is also known as the contribution approach because it focuses on the contribution margin (i.e. the difference between total sales revenue and variable costs) rather than allocating fixed costs to products. The other options (A, B, and C) refer to different costing methods. Functional costing is a term used in government accounting, indirect costing is another name for overhead costing, and absorption costing is a method that allocates both variable and fixed costs to products.

Variable Costing Is Also Called ________