Briefly Explain Why Many Companies Use Absorption Costing for External

question 13

Essay

Briefly explain why many companies use absorption costing for external reporting as well as internal accounting.

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Definitions:

Hourly Wage

The amount of money paid for each hour of work performed, often used in employment agreements.

Algebraic Expression

An expression constructed from integers, variables, and algebraic operations.

Antifreeze

A liquid added to the water in a cooling system to lower its freezing point, commonly used in automobile engines.

Cooling System

A system designed to remove heat from an area or machinery, commonly using a fluid or air to transfer heat away.