The Absorption-Cost Approach Is Used by Most Companies for All

question 120

Multiple Choice

The absorption-cost approach is used by most companies for all of the following reasons except that

• A) absorption cost information is readily provided by a company's cost accounting system.
• B) absorption cost provides the most defensible bases for justifying prices to interested parties.
• C) basing prices on only variable costs could encourage managers to set too low a price to boost sales.
• D) this approach is more consistent with cost-volume-profit analysis.

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Intervening Variable

A hypothetical concept that explains the relationship between the independent variable and the dependent variable in an experimental setting.

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A reduction in the efficacy of the immune system's ability to fight infections and diseases, potentially caused by stress, medication, or certain medical conditions.

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