Which of the Following Methods Is Not Used to Reduce

question 38

Multiple Choice

Which of the following methods is not used to reduce the undesirable affects of absorption costing?

• A)Focus on careful planning and budgeting of inventory amounts.
• B)Incorporate carrying charges for inventory in the internal accounting system.
• C)Place greater weight on reporting performance over longer periods.
• D)Include only financial variables in the measures used to evaluate performance.
• E)Use alternative methods of inventory costing for internal purposes that does not create incentives for managers to produce for inventory.

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Definitions:

Market Analysis

The study of market trends, conditions, and characteristics to inform business decisions, often involving an examination of supply and demand, competitor strategies, and customer preferences.

Financial Projections

Estimates of future financial performance of a business, including forecasts of income, revenue, expenses, and capital requirements.

External Funding Requirement

The amount of money a company needs to raise from outside sources to finance its activities, investment, and growth.

Growth In Assets

An increase in a company's total assets over a period of time, reflecting expansion and acquisition of new assets for operations or investment purposes.