Why is it appropriate to use variable costing when planning production in the short term?

Q: How does the variable cost per unit change as the level of activity (or cost driver) increases? Why?

A: A variable cost changes is directly proportional to the change in the level of activity or cost…

Q: How do you make a decision in case of special order? Explain. Use examples if required.

A: Hey, since there are multiple questions posted, we will answer the first question. If you want any…

Q: Special order, opportunity cost. In order to determine whether a special order should be accepted at…

A: Opportunity Cost:Opportunity cost is total of potential income and other benefits that are lost due…

Q: If the units produced exceed the units sold, which method would you expect to show the higher net…

A: Variable Costing: Variable Costing takes into account only variable manufacturing costs for…

Q: Cost-volume-profit analysis favors either variable costing or absorption costs. Why?

A: The CVP analysis is used to analyse the impact of changes in variable cost and fixed cost on net…

Q: Why would someone use variable costing over absorption Costing ?

A: The variable costing method is the method that only includes the variable costing whereas,…

Q: cuss the advantages and disadvantages of using variable costing

A: Answer: Variable costing is the costing system that is variable as per unit produced. The advantages…

Q: What are the arguments for and against "backflush" costing?

A: Arguments for and against Backflush costing: Backflush costing system is that the method of…

Q: What are the factors that affect the breakeven point under (a) variable costing and (b) absorption…

A: Breakeven Point:The level of production that is required to cover the fixed costs and variable costs…

Q: Why is absorption costing the method allowable for GAAP yet managers prefer variable costing

A: In variable costing only variable costs are included in the product cost. Fixed costs re considered…

Q: When units produced exceed units sold, how does operating income differ between variable costing and…

A: Absorption costing:   Absorption costing is compulsory under Generally Accepted Accounting…

Q: How is target costing different from the usual process of setting prices?

A: The price of a product is set on the basis of the cost of the product. The price of the product is…

Q: How lean production eliminate the difference between absorption and variable costing

A: Following is the answer to the given question

Q: Why do proponents of variable costing prefer variable costing when making pricing decisions?

A: Definition:   Variable costing: It refers to the method of product costing in which the price of the…

Q: Identify the costs included under variable costing.

A: The costs can be distinguished as variable and fixed costs.

Q: Generally speaking, net operating income under variable and absorption costing will: Multiple Choice

A: The correct option is: be equal only when production and sales are equal.   Net Operating Income =…

Q: The variable overhead spending variance has to do with the efficient use of The overhead items. All…

A: Variance: The difference between the actual cost or price and the budgeted (standard) cost or price…

Q: How does Lean Production reduce or eliminate the difference in reported net operating income between…

A: Absorption Costing: Absorption costing is a method for calculating the full cost or total cost of a…

Q: How do the cost flows in backflush costing systems differ from those in traditional costing systems?

A:

Q: What are the expected cost takedown rates?

A: When a company offers new issues in the market, such as stocks or bonds, they appoint an…

Q: Under absorption costing, how is it possible to increase net operating income without increasing…

A: Format of Income Statement under Absorption Costing

Q: Which costing system would be more efficient when direct materials and direct labor costs are high,…

A: There are mainly two types costing method Traditional costing Activity based costing

Q: Compare actual and normal costing. What is the benefit of each? What is a circumstance in which each…

A: Actual Costing: Actual costing is a cost bookkeeping framework that utilizes genuine cost,…

Q: What effect does an increase in volume have on—a. Unit fixed costs?

A: Fixed costs are those costs of business which remain fixed in total irrespective of change in volume…

Q: In CPV analysis/ marginal costing, the term contribution is used. What does Contribution mean to…

A:

Q: Which of the following characteristics would be an indicator that a company would benefit from…

A: Activity-based costing: Activity-based costing is the method of costing is used by the company in…

Q: How do current cost management techniques vary from earlier ones in terms of life cycle costing and…

A: Life cycle cost which traces the costs and revenues over a period of life of product.  Life cycle…

Q: Required: When compared to variable costing income, Gem's absorption costing income is

A: Solution:- Given, Inventory for Gem's sole product totaled = 6,000 units and 5,200 units…

Q: Critically evaluate the concept and application of marginal costing

A: Marginal Costing :— Marginal Costing is the Part of Cost management Techniques.  Marginal Costing…

Q: What is the difference between absorption costing and variable costing?

A:

Q: The product costs per unit under variable costing would be:

A: Variable costs are those costs that change with the change in the number of products manufactured by…

Q: In detail discuss what are  the advantages and disadvantages of using FIFO for process costing. In…

A: First-in First-out(FIFO) method under process costing is based on the assumption that at the…

Q: What are the pros/cons of product costing allocation methods and how they influence distortion of…

A: Product costing allocation methods are used to assign or allocate a cost to manufactured/produced…

Q: Discuss the advantages and disadvantages of using variable costing in an essay form

A: Answer: Variable costing system is the costing system that helps to easy analyze the company profit…

Q: Differences in operating income between variable costing and absorption costing are due solely to…

A: Absorption costing: It refers to the method of product costing in which the price of the product is…

Q: How is Variable Costing and Absorption Costing differs from each other?

A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…

Q: How does the fixed cost per unit change as the level of activity (or cost driver) increases? Why?

A: Fixed cost refers to such overheads that are not directly related to the business and which do not…

Q: How to do absorption and marginal costing?

A: The income statement can be prepared using Marginal costing and absorption costing.

Q: Why do many managers prefer variable costing over absorption costing?

A: Variable Costing:  The variable costing is the method of costing in which only the variable…

Q: what is the definition of fixed, variable, and mixed costs? Are variable costs or fixed costs easier…

A: Introduction: Cost accounting is a type of managerial accounting that capture a firm's production…