Manager: The use of absorption versus variable costing can significantly affect profitability of a company. Accountant: Not

Question:

Manager: The use of absorption versus variable costing can significantly affect profitability of a company.

Accountant: Not really. Before the accountant could explain the differences, the manager instructed the accountant to prepare statements such that they project the company in the best possible way.

Required:

As the accountant of the company, how will you explain the differences between the two methods to the manager?

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Related Book For answer-question

Introduction to Managerial Accounting

ISBN: 978-1259105708

5th Canadian edition

Authors: Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan

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Question Posted: Oct 25, 2019 11:30 AM

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Manager: The use of absorption versus variable costing can significantly affect profitability of a company. Accountant: Not

Question:

Step by Step Answer:

The arguments in favour of the two methods are as follows Absorption Costing In comp...View the full answer

Introduction to Managerial Accounting

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