The Variable Costing Format Is Often More Useful to Managers

question 35

Multiple Choice

The variable costing format is often more useful to managers than the absorption costing format because

• A)costs are classified by their behavior.
• B)costs are always lower.
• C)it is required for external reporting.
• D)it justifies higher product prices.

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Definitions:

Going Public

This involves a private company offering its shares to the public in a new stock issuance, allowing it to raise capital from public investors.

Disclose Information

The act of making previously private information known to the public or to specific individuals in a legal or regulatory context.

Shelf Prospectus

Frequently, companies will file a prospectus and then update it with a short-form prospectus just before an offering. This procedure is termed a shelf prospectus because companies put new securities “on the shelf” and then later sell them when the market is right.

Prospectus Supplement

A document that provides additional information to a prospectus, detailing specifics about an investment offering for potential investors.