Variable Costing Is More Appropriate Than Absorption Costing When the Decision

question 87

Multiple Choice

Variable costing is more appropriate than absorption costing when the decision ________.

• A)relates to production planning within the capacity limits in the short run
• B)involves reducing fixed costs that are controllable by the upper management
• C)does not involve analysis of profitability based on sales mix
• D)does not involve analysis of contribution margin

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Definitions:

Terminating Decimal

A decimal that has a finite number of digits after the decimal point.

Decimal Equivalent

The numerical representation of a fraction where the denominator is a power of ten, expressing the fraction as a decimal.

Percent Equivalent

A percentage that represents the same value as a given fraction or decimal.

Five-figure Accuracy

Five-figure accuracy refers to numerical precision up to five significant digits in measurement or computation.