Which of the Following Is a Valid Reason for Using

question 132

Multiple Choice

Which of the following is a valid reason for using variable costing?

• A) Fixed production cost should be ignored when costing units of inventory since it is not essential to the production process.
• B) Absorption costing recognizes fixed costs as expense regardless of volume of production.
• C) Absorption costing may motivate managers to overproduce in order to increase profits.
• D) Under variable costing managers can increase profitability by increasing the volume of production.

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Definitions:

Fraternal Twins

Siblings born at the same time who have developed from two different eggs fertilized by two different sperm, making them genetically distinct.

Genetically Similar

Describes organisms that share a high proportion of genes or DNA sequences.

Non-twin Siblings

Non-twin siblings are brothers or sisters who do not share the same birth event, differing from twins as they are born at different times.

Correlation Coefficients

Statistical measures that indicate the strength and direction of a relationship between two variables, ranging from -1 (a perfect negative correlation) to +1 (a perfect positive correlation).