A Small Company Has One Factory and Produces Only One

Multiple Choice

A small company has one factory and produces only one product,although production fluctuates weekly according to demand.
It has a range of fixed and variable costs.
Which of the following statements about Absorption Costing is Correct?

A) As there is only one product, absorption costing is unnecessary. The unit cost will always be the same.
B) Absorption costing is necessary for stock valuation, although unit cost will vary with production.
C) As there is only one product, absorption costing is unnecessary. The total cost will always be the same.
D) Absorption costing is necessary for stock valuation, but the unit cost will always be the same.