Direct Costing May Be Used For

question 53

Multiple Choice

Direct costing may be used for:

• A) internal reporting purposes.
• B) external financial reporting purposes.
• C) income tax reporting purposes.
• D)all of the above.

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Definitions:

Percentage Of Sales Method

An accounting technique used to forecast the future financial positions based on a set percentage of sales.

External Funds

Capital that comes from outside of a company, including debt financing and equity financing from external investors.

Sales Increase

The rise in the volume or value of sales of goods or services over a specified period compared to a previous period.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and earnings without borrowing new funds or seeking additional investment.