2. Consider the following statements about absorption costing and variable costing:Variable costing is consistent with contribution reporting and cost-volume-profit analysis.Absorption costing must be used for external financial reporting.A number of companies use both absorption costing and variable costing.Which of the above statements is (are) True?Group of answer choicesa. I, II and III.b. II onlyc. I and IId. III onlye. I only.

Absorption costing and variable costing are managerial accounting and financial reporting cost…

Answered: Consider the following statements about…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 19MC: When the number of units in ending inventory increases through the year, which of the following is...

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2. Consider the following statements about absorption costing and variable costing:

1. Variable costing is consistent with contribution reporting and cost-volume-profit analysis.
2. Absorption costing must be used for external financial reporting.
3. A number of companies use both absorption costing and variable costing.

Which of the above statements is (are) True?

Group of answer choices

a. I, II and III.

b. II only

c. I and II

d. III only

e. I only.

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