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According to the text, why do managers prefer variable costing?
According to the text, why do managers prefer variable costing?
- It is easily understood and preferred for internal analysis (correct)
- It simplifies the understanding of the income statement
- It separates fixed and variable costs
- It provides necessary information for cost volume profit analysis
According to the text, which statement is true about profit and losses in relation to sales revenue?
According to the text, which statement is true about profit and losses in relation to sales revenue?
- Profit and losses are only affected by inventory variation
- Profit and losses are only affected by production variation
- Profit and losses have no relationship with sales revenue (correct)
- Profit and losses are affected by inventory and production variation
According to the text, how does variable costing simplify the understanding of the income statement?
According to the text, how does variable costing simplify the understanding of the income statement?
- By separating fixed and variable costs (correct)
- By providing necessary information for cost volume profit analysis
- By preparing the income statement in a contribution margin format
- By being easily understood and preferred for internal analysis
According to the text, why is the income statement prepared in a contribution margin format under the variable costing system?
According to the text, why is the income statement prepared in a contribution margin format under the variable costing system?
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According to the text, what is the relationship between the variable costing system and the standard costing system?
According to the text, what is the relationship between the variable costing system and the standard costing system?
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