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.Variable 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 and III.