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.

---

Definitions:

Data Link

A communication channel used for transferring digital data between devices or systems.

WT Digital Display

A digital display technology, possibly branded or specific in functionality, notable for information presentation or monitoring.

Rotating Clutch Module

A component within an automatic transmission that facilitates the transfer of power from the engine to the transmission while allowing for changes in speed and torque.

Planetary Gearsets

A set of gears consisting of a central sun gear, a ring gear, and several planet gears that rotate around the sun gear, typically used in automatic transmissions.