Variable costing is utilized to evaluate the performance of
A) investment centers.
B) revenue centers.
C) discretionary cost centers.
D) profit centers.

Question

Quizplus · Accepted Answer

Variable costing is mainly used to evaluate the performance of profit centers, which are responsible for generating revenue and managing costs to generate a profit. The focus in variable costing is on the variable costs associated with producing goods or services, and these costs are considered to be directly related to the level of activity in the company. Therefore, profit centers that are responsible for managing variable costs are the best suited for evaluation using variable costing.

Variable Costing Is Utilized to Evaluate the Performance of