According to a 2009 survey undertaken by CIMA, variable (or marginal) costing is used by almost 40 per cent of firms. Management accountants from a wide range of sectors, including manufacturing and service firms, were queried on how they use traditional techniques to cost products, set prices, analysis and report revenues/profit and allocate resources. Absorption costing was used by approximately 45 per cent of respondent firms. It also reports that variable costing is widely used across organizations of all size. Based on this quite recent research, it would seem variable costing is a widely used internal reporting and analysis tool.

Questions 

1 Do you think variable costing is more likely to be used by manufacturing or service sector firms?

2 Do you think integrated accounting information system would be able to produce internal profit statements using variable costing?