2. Consider the following statements about absorption costing and variable costing:Variable costing is consistent with contribution reporting and cost-volume-profit analysis.Absorption costing must be used for external financial reporting.A number of companies use both absorption costing and variable costing.Which of the above statements is (are) True?Group of answer choicesa. I, II and III.b. II onlyc. I and IId. III onlye. I only.

Absorption costing and variable costing are managerial accounting and financial reporting cost…

Answered: Consider the following statements about…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 14MCQ

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2. Consider the following statements about absorption costing and variable costing:

1. Variable costing is consistent with contribution reporting and cost-volume-profit analysis.
2. Absorption costing must be used for external financial reporting.
3. A number of companies use both absorption costing and variable costing.

Which of the above statements is (are) True?

Group of answer choices

a. I, II and III.

b. II only

c. I and II

d. III only

e. I only.

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