Many companies use variable costing for internal reporting and evaluation of managers.

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Variable costing is often used by companies for internal reporting and evaluation of managers. This is because it focuses on the variable costs associated with producing goods or services, which can be easily attributed to specific products, projects, or departments. By contrast, absorption costing incorporates both fixed and variable costs and can make it more difficult to isolate the costs associated with individual business units or activities. Therefore, variable costing is often preferred for internal decision-making and performance evaluation purposes.

Many Companies Use Variable Costing for Internal Reporting and Evaluation