Test your knowledge with this set of multiple choice questions (MCQ) covering the topic of variable costing. Answering every question correctly will assist your exam preparation, interviews, and professional work. To begin, just click on the "Start Quiz" button.
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Variable Costing MCQs FAQs
Variable costing is a costing methodology that assigns the costs of production to the products or services based on the variable costs incurred. The fixed costs are expensed in the period in which they are incurred.
The benefits of using variable costing include greater clarity and transparency into the costs of products and services, a more accurate assessment of profitability and performance, and a greater ability to manage costs and pricing decisions.
It may not be suitable for all types of businesses or industries, it does not take into account the impact of fixed costs on profitability, and it can be more complex and time-consuming to implement than other costing methods.
Variable Cost is also known as direct costing.
Variable costing is most suited for industries that have a high degree of variability in their costs, such as manufacturing and retail. It can be less suitable for businesses with more stable or consistent costs, such as those in the service industry.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.