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Differences between variable and absorption costing

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Reference no: EM13873913 , Length: 500 words

Answer each of the following questions in 250-300 words.

Question 1 For what is cost-volume-profit (CVP) analysis used? What are some main underlying assumptions that make CVP analysis useful for decision makers? Why might decision makers use CVP analysis?

Question 2 What are the differences between variable and absorption costing? Why is variable costing not allowed for GAAP reporting? Which method is more useful for internal decision making? Why? As a manager, which would you prefer? Why?

Reference no: EM13873913

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