Which of the Following Is a Reason for Companies to Use

question 140

Multiple Choice

Which of the following is a reason for companies to use absorption costing for internal accounting?

• A) It is the required inventory method for internal accounting as per GAAP.
• B) It measures the cost of all resources, whether manufacturing or nonmanufacturing, necessary to produce inventory.
• C) It does not take into account fixed manufacturing overhead while valuing inventory and hence is more suited for decision making.
• D) It can help prevent managers from taking actions that make their performance measure look good but that hurt the income they report to shareholders.

---

Definitions:

Mean Number

The average value of a set of numbers, calculated by dividing the sum of all numbers by the count of those numbers.

Significance Level

In hypothesis testing, the threshold below which the p-value must fall for the results to be considered statistically significant, commonly set at 0.05.

Mean Score

the average score calculated by adding all the individual scores and dividing by the number of scores.

Programming Ability

The capacity to design, write, test, and debug/troubleshoot computer code in order to create computer applications, websites, or systems.