Absorption costing is required for external reporting under generally accepted accounting principles.

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Quizplus · Accepted Answer

Absorption costing is required for external reporting under generally accepted accounting principles (GAAP) as it includes all production costs, both variable and fixed, in the cost of a finished product. This method is used to calculate the cost of goods sold and ending inventory for financial reporting purposes.

Absorption Costing Is Required for External Reporting Under Generally Accepted