Which of the Following Is a Reason for Companies to Use

Multiple Choice

Which of the following is a reason for companies to use absorption costing for internal accounting?

A) It is the required inventory method for internal accounting as per GAAP.
B) It measures the cost of all resources, whether manufacturing or nonmanufacturing, necessary to produce inventory.
C) It does not take into account fixed manufacturing overhead while valuing inventory and hence is more suited for decision making.
D) It can help prevent managers from taking actions that make their performance measure look good but that hurt the income they report to shareholders.