Question: Absorption costing a) is preferred to variable costing for external reporting purposes, but either method is acceptable. b) normally results in higher net income than

Absorption costing

a) is preferred to variable costing for external reporting purposes, but either method is acceptable.

b) normally results in higher net income than variable costing, and is therefore required for income tax purposes.

c) is not allowed for external reporting purposes.

d) is required under GAAP.

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