Question: In the United States more than half of the major
In the United States, more than half of the major companies use variable costing for at least some internal-reporting purposes. These companies must make adjustments to these reports for external-reporting purposes. Explain.
Answer to relevant Questions“With variable costing, only direct materials and direct labor are inventoried.” Do you agree? Why?Why are companies with small levels of inventory generally unconcerned with the choice of variable or absorption costing?There are two different methods for computing proration. Compare the two approaches.San Antonio Welding Company applies factory overhead at a rate of $8.20 per direct-labor hour. Selected data for 20X0 operations are as follows (in thousands):Compute for both cases1. factory overhead applied.2. total ...Refer to the chapter discussion of Enriquez Machine Parts Company beginning on page 534. Suppose Enriquez decided to use only one overhead cost pool for both departments with direct labor cost as the single cost-allocation ...
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