What is the major rationale for the use of variable costing? Discuss why variable costing may not be used for financial reporting purposes.© BrainMass Inc. brainmass.com June 4, 2020, 3:01 am ad1c9bdddf
Under variable or direct costing, the fixed manufacturing overhead costs are not allocated or assigned to (not absorbed by) the products manufactured. Variable costing is often useful for management's decision-making. However, absorption costing is required for ...
This solution outlines the principle of variable costing and discusses why it may not be used for financial reporting purposes.