Consider the Following Statements About Absorption Costing and Variable Costing

Multiple Choice

Consider the following statements about absorption costing and variable costing:
I. Variable costing is consistent with contribution reporting and cost-volume-profit analysis.
II. Absorption costing must be used for external financial reporting.
III. A number of companies use both absorption costing and variable costing.
Which of the above statements is (are) true?

A) I only.
B) II only.
C) III only.
D) I and II.
E) I, II, and III.