Which type of costing system can only be used for internal financial reporting because it is unacceptable by GAAP?
A)Prime costing
B)Out-of-pocket costing
C)Variable costing
D)Absorption costing

Question

Quizplus · Accepted Answer

Variable costing can only be used for internal financial reporting because it violates GAAP's requirement that all fixed manufacturing costs should be included in the cost of inventory. Variable costing only includes variable manufacturing costs in the cost of inventory.

Which Type of Costing System Can Only Be Used for Internal