Which of the following statements is
A) Under variable costing,the income statement is prepared using a contribution margin approach.
B) Variable costing is not allowed for external financial reporting,but many companies find it useful for internal managerial reports.
C) Under variable costing,an increase in production increases the amount of profit reported on the income statement,even if the additional units are not sold.
D) Under variable costing,fixed manufacturing costs are expensed in the period incurred.

Question

Quizplus · Accepted Answer

Although managers may still overproduce under variable costing,at least they are not tempted to do so by the lure of reporting higher profits.Using variable costing,increases in production have no effect on the amount of reported profit (or net income)reported in the income statement.All of the other answer choices are correct statements.

Which of the Following Statements Is