The chief executive officer told Nick, the production manager at BRS Corporation, to reduce costs and increase profits. In response, Nick decided to produce more units for inventory. BRS is most likely using:

Question

Quizplus · Accepted Answer

The strategy of producing more units for inventory indicates the use of absorption costing, which allocates fixed overhead costs to units produced. By producing more units, the fixed costs are spread out over a larger number of units, reducing the cost per unit and potentially increasing profits. Variable costing ignores fixed overhead costs and would not support this strategy, while throughput and capacity-based costing may not be as commonly used or relevant to this situation.

The Chief Executive Officer Told Nick, the Production Manager at BRS