Variable costing allows a manager to classify controllable costs as
A)variable and fixed costs.
B)avoidable and unavoidable costs.
C)necessary and unnecessary costs.
D)short-term and long-term variable costs.

Question

Quizplus · Accepted Answer

Variable costing is a method of cost accounting that segregates all controllable costs into variable and fixed categories. This classification helps managers in making better decisions related to pricing, production, and inventory management. By separating variable costs such as direct materials, direct labor, and variable overhead costs, from fixed costs such as rent, salaries, and depreciation, managers can focus on improving the cost structure of their business. Therefore, choice A is the best option.

Variable Costing Allows a Manager to Classify Controllable Costs as