Chapter 20, Problem 4R

Why would managers prefer variable costing over absorption costing?

Why is a scattergraph a good first step in separating mixed costs into their fixed and variable components?

How does the target cost method differ from cost-plus approaches?

If the units produced and unit sales are equal, which method would you expect to show the highernet operating income, variable costing or absorption costing? Why?

If the units produced exceed unit sales, which method would you expect to show the higher netoperating income, variable costing or absorption costing? Why?

WHAT WOULD BE THE APPROXIMATE PER UNIT SETUP COST FOR GREEN UNITS PRODUCT?

Consider a situation in which a firm needs to make a decision regarding the resources to allocate between two products. One product makes a significantly larger contribution margin than the other. How might the contribution margin affect the decision that the firm makes? What if both contribution margins were positive or both were negative?  Are there other factors when considering the contribution margin you should look for?  What makes the contribution margin positive or negative?

Why would someone use variable costing over absorption Costing ?

What do you mean when you say "fixed costs"? What's the point? Is it possible to have a combined price? Describe each with a specific example