ACC 561 Week 5 Costing methods paper

In this case, would it be better to use the variable or absorption costing method, and why?

What are the benefits of the two methods?

Which method would lead to the best decision when a competitor is submitting a lower bid for your product?

Absorption Costing vs Variable Costing

In comparison to absorption costing which is used for external purpopses and which is required by accounting standards, variable costing is a costing tool that is used for internal decision-making purposes.

The logic of variable costing differs from absorption costing as it assigns only variable costs to inventory and cost of goods sold. When using variable costing your product costs would therefore consist of Direct Material, Direct Labor, and Variable Manufacturing...