Which of the following best defines variable costing?
A)a good way to value inventories for the balance sheet
B)a useful tool for external reporting purposes
C)not a useful tool for companies with multiple segments
D)a useful tool for management decision making

Question

Quizplus · Accepted Answer

Variable costing is a useful tool for management decision making as it helps in identifying the variable costs associated with the production of goods or services. It focuses on direct costs, such as materials, labor, and variable overhead, and excludes fixed costs, such as rent, salaries, and utilities, from product costs. This approach helps managers make informed decisions about pricing, product mix, and resource allocation.

Which of the Following Best Defines Variable Costing