Asked by Taylor Gonzalez on May 25, 2024
Verified
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
VL
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.
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