Which method provides an incentive for managers to produce more units in order to increase income for performance evaluations?
A)Full costing
B)Variable costing
C)Both full costing and variable costing
D)Neither full costing nor variable costing

Question

Quizplus · Accepted Answer

Full costing includes fixed manufacturing costs in inventory, which can incentivize managers to produce more units to spread these costs over more units, thus increasing reported income.

Which Method Provides an Incentive for Managers to Produce More