what information provided by a variable costing income statement is used in computing the break-even point? is this information on absorption costing income statement ? Explain the answer?
Answers
Answer:
Absorption costs and variable costs are methods used to inform corporate work in progress and inventory, for accounting purposes.
Explanation:
Absorption costs include all costs associated with product production. Flexible costs include variable costs incurred directly in production and no fixed costs. For reporting purposes, absorption costs are required under the Financial Accounting Standards Board's Generally Accepted Accounting Principles (GAAP) .1
Absorption vs. variable costing will only be a factor in companies' cost of goods sold (COGS) in their income statement.1 Although any company may use both methods for different reasons, public companies are required to use the cost of absorption due to their GAAP. accounting obligations.
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