Why Have Many Companies Switched from Absorption Costing to Variable

question 212

Multiple Choice

Why have many companies switched from absorption costing to variable costing for internal reporting?
Variant question

• A)To increase bonuses for managers
• B)So the denominator level is more accurate
• C)To reduce the undesirable incentive to build up inventories
• D)To comply with external reporting requirements

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Definitions:

Texas

A state located in the southern region of the United States, known for its large size and diverse landscapes.

Sedimentary Cycle

Biochemical cycle such as the phosphorus cycle, in which the atmosphere plays little role and rocks are the major reservoir.

Carbon Cycle

Biogeochemical cycle in which carbon is exchanged between oceans, soils, atmosphere, and living organisms.

Phosphorus Cycle

Movement of phosphorus among Earth’s rocks and waters, and into and out of food webs.