Which of the Following Is a Reason for Companies Adopting

question 3

Multiple Choice

Which of the following is a reason for companies adopting variable costing for internal reporting purposes?

• A) It is cost-effective to use variable costing for both internal and external reporting.
• B) It reduces the incentives for undesirable buildup of inventories.
• C) It measures the cost of all manufacturing resources, whether variable or fixed, necessary to produce inventory.
• D) It assists in accurate pricing decisions in case of long-run pricing.

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Definitions:

Secondary Group

A group that is formal and impersonal, often organized around instrumental goals. See also Primary group.

Ethnocentrism

In intergroup relations, the tendency to regard one’s own group as the center of everything and to evaluate other groups in reference to it; the tendency to regard one’s in-group as superior to all out-groups.

Goal Isomorphism

The concept of having converging or similar objectives across different individuals, groups, or systems.

Intergroup Conflict

A situation where members of different groups experience friction, disagreement, or opposition due to differing interests, beliefs, or objectives.