Absorption costing is more useful than variable costing in determining a company's break-even point.

Question

Quizplus · Accepted Answer

Variable costing is more useful than absorption costing in determining a company's break-even point because it separates fixed and variable costs, providing a clearer picture of the contribution margin needed to break even. Absorption costing includes fixed costs in the product cost, which can lead to overestimating the break-even point.

Absorption Costing Is More Useful Than Variable Costing in Determining