For external reporting purposes, your company uses Absorption Costing with Actua

Question

For external reporting purposes, your company uses Absorption Costing with Actual Costing. For internal reporting purposes, your company uses Variable Costing with Standard Costing. Which of the following statements is FALSE? with the following statements is FALSEar Direct Materials would be the same for external and internal reporting purposes. Direct Labor would be the same for external and internal reporting purposes. Manufacturing Overhead would be the same for external and internal reporting purposes. O C O D All of the above

Explanation / Answer

Answer : Option D : All the above statements are true.

For external eporting (absorptive Costing) and internal reporting (variable Costing), the direct material cost and the labor cost are same , with the variable manufacturing overhead is also same for i.e. for external and internal reporting costing methods.

The things which are not same for external and internal reporting are -The fixed manufcaturing overhead, variable selling and administrative expenses, fixed selling and administrative expenses.

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