Select the incorrect statement regarding the use of average unit costs.
A) Average costs should be calculated for a sufficiently long time period to capture seasonal fluctuations in costs.
B) Average costs are often more relevant for decision making than are actual costs.
C) Average cost information can help managers evaluate performance of the company or departments in the company.
D) Cost averaging should be used only for fixed costs, and not for variable costs.

Question

Quizplus · Accepted Answer

Cost averaging can be used for both fixed costs and variable costs. In fact, it is often more useful for variable costs as they tend to fluctuate more and can be harder to predict.

Select the Incorrect Statement Regarding the Use of Average Unit