Asked by Matias Morales on Jun 08, 2024
Verified
The variable costing income statement classifies costs based on cost behavior rather than function.
Variable Costing
An accounting method where variable costs are charged to cost units and fixed costs are treated as period costs.
Cost Behavior
Refers to the way different types of production costs change when there is a change in the level of production.
- Contrast absorption costing with variable costing, pointing out the dissimilarities in the treatment of costs and the reporting of income.
Verified Answer
VM
Vivian MohamadJun 13, 2024
Final Answer :
True
Explanation :
The variable costing income statement classifies costs based on whether they are variable or fixed, regardless of their function within the organization. This provides a better understanding of the cost structure and helps with decision-making.
Learning Objectives
- Contrast absorption costing with variable costing, pointing out the dissimilarities in the treatment of costs and the reporting of income.
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