Variable Costing Has the Following Advantages

question 52

Multiple Choice

Variable costing has the following advantages:

• A) CVP requires the use of information provided by variable costing.
• B) Changes in production and inventory levels do not impact the calculation of profits.
• C) Under variable costing,cost behaviour is emphasised and fixed costs are separated from variable costs on the income statement.
• D) All of these are advantages of variable costing.

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Definitions:

Present Value

The present valuation of a future financial sum or sequences of cash inflows, based on a specified rate of return.

Compounded Semi-annually

The process where interest is added to the principal of an investment or loan twice a year, resulting in interest earning interest.

RRSP

Registered Retirement Savings Plan, a Canadian investment account for holding savings and investment assets, aimed at retirement planning.

Month-end Contributions

Payments or deposits made into a particular account or for a specific purpose at the end of a month.