Question

The​ ________ method allows managers to increase operating income through production by producing more products than needed. A. variable costing B. marginal costing C. direct costing D. absorption costing

Answer 1

Answer:

D- Absorption costing

Explanation:

Absorption costing allows managers to increase their operating income by producing more product than needed because of the variable and fixed overhead costs involved in producing the product .

Absorption costing make use of all cost of production such as fixed costs of operation, factory rent, and cost of utilities in the factory.

Absorption costing help managers or business owners to know that fixed costs involved in production are vital

and it often shows little fluctuation of the net profit in case of frequent production.