Question

Which of the following is a disadvantage of using variable costing? Select one: A. Two sets of accounting records must be maintained. B. Inventory values tend to be overstated. C. CVP relationships are more difficult to determine than under absorption costing. D. Per-customer or per-product contribution margin is obscured.

Answer 1

Two sets of accounting records must be maintained.

Step-by-step explanation:

Variable costing is the costing in which only variable cost is considered i.e direct material cost, direct labor cost, variable manufacturing overhead cost therefore no fixed cost could be considered

Under this the disadvantage is that it recognized two accounting records sets which are to be maintained

Hence, the first option is correct