Which of the following is a disadvantage of using variable costing?
A) Two sets of accounting records must be maintained.
B) Inventory values tend to be overstated.
C) CVP relationships are more difficult to determine than under absorption costing.
D) Per-customer or per-product contribution margin is obscured.
E) All of the above

Question

Quizplus · Accepted Answer

Variable costing requires maintaining two sets of accounting records if a company also reports under absorption costing for financial reporting purposes. This is because variable costing treats fixed manufacturing overhead as a period cost, while absorption costing includes it in product costs, necessitating different accounting treatments.

Which of the Following Is a Disadvantage of Using Variable