What are the limitations of using variable costing?

Variable Costing

An accounting approach that solely accounts for variable production expenses like direct materials, direct labor, and variable manufacturing overhead in the calculation of product costs.

Limitations

The constraints or restrictions that hinder a process, investigation, or analysis.

Recognize the limitations and benefits of using variable and absorption costing.

Verified Answer

Vivian LuongMay 31, 2024

Final Answer :

Variable costing is not an acceptable basis for either external reporting or tax reporting.

Learning Objectives

Recognize the limitations and benefits of using variable and absorption costing.

What are the limitations of using variable costing?

Definitions

Learning Objectives

Learning Objectives

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