Question: A firm prepares its finished goods inventory two ways - using variable costing and using absorption costing. Which method is acceptable for external reporting purposes?

A firm prepares its finished goods inventory two ways - using variable costing and using absorption costing. Which method is acceptable for external reporting purposes?

Group of answer choices

a. Absorption Costing

b. Neither is acceptable for external reporting

c. Variable Costing

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Business is growing and Mom and the kids are sure that Dad would be proud to see how his corner grocery store has evolved into a supermarket. However, Mom is concerned about liability. Mom's oldest...

Which one of the following combination of statements is true? Group of answer choices Operating leverage relates to the use of fixed costs and financial leverage relates to the use of debt. And, the...

I need help to answer the first question: 1.What characteristic of absorption costing caused the drop in net operating income for the second quarter and what could the controller have said to explain...

Please answer all parts 07 5 Sierra Company incurs the following costs to produce and sell its only product eBook Variable costs per unit Direct materials $ 12 Direct labor $9 Variable manufacturing...

Exercise 4-13 (Static) Inferring Costing Method; Unit Product Cost [LO4-1 Sierra Company Incurs the following costs to produce and sell its only product $ $ 10 5 Variable costs per unit: Direet...

Controller, Judy Koch, in a recent speech said, "I rarely see a real variable cost or a truly fixed cost." What did she mean? Include in your response an explanation of the difference in behavior of...

Exercise 7-13 Inferring Costing Method; Unit Product Cost [LO7-1] Sierra Company incurs the following costs to produce and sell its only product Variable costs per unit. Direct materials Direct labor...

Sierra Company incurs the following costs to produce and sell its only product. 11 Exercise 6-13 Inferring Costing Method: Unit Product Cost [L06-1] 3 points Sierra Company incurs the following costs...

Sierra Company incurs the following costs to produce and sell its only product. Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and...

Sierra Company incurs the following costs to produce and sell its only product Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and...

You are the auditor of Prospecting (Pty) Ltd. The company owns the right to prospect for minerals on various properties. Prospecting (Pty) Ltd holds significant quantities of spare parts in stock of...

As reported in Runners World magazine, the times of the finishers in the New York City 10-km run are normally distributed with mean 61 minutes and standard deviation 9 minutes. a. Determine the...

Monica is an agent focused on serving seniors eligible for Medicare. As she reviews her records, she is trying to determine which of the following items are considered compensation for plan year 2026...

The temperature at the surface of the Sun is approximately 5 700 K, and the temperature at the surface of the Earth is approximately 290 K. What entropy change occurs when 1 000 J of energy is...

The surface of the Sun has a temperature of about 5 800 K. The radius of the Sun is 6.96 X 108 m. Calculate the total energy radiated by the Sun each second. Assume that the emissivity of the Sun is...

The speed of sound in air is 331 m/s. During the next thunderstorm, try to estimate your distance from a lightning bolt by measuring the time lag between the flash and the thunderclap. You can ignore...

The speed of a bullet as it travels down the barrel of a rifle toward the opening is given by v = (- 5.00 x 107)t 2 + (3.00 x 105)t, where v is in meters per second and t is in seconds. The...

The shore of the ocean is very rocky at a particular place. The rocks form a cave sloping upward from an underwater opening, as shown in Figure Q19.13a. (a) Inside the cave is falls with the tides, ,...

The major arguments against advertising are that it is wasteful and that it can be deceptive. a . True b . False

Explain the Uniform Guidelines related to various types of illegal employment discrimination, including sexual harassment, national origin, religion, and caregiver (family responsibility)...

Discuss who is responsible for ensuring equal employment opportunity.

What are the significant U.S. Supreme Court decisions that have had an impact on EEO? On Affirmative Action?