Question

Firms that follow variable-cost pricing Multiple Choice sell their products at lower net prices abroad than in the domestic market. ensure that no unit of a similar product is different from any other unit in terms of cost. tend to have high variable costs relative to fixed costs. often do so to maximize revenue by matching demand with a limited supply. ensure that each unit bears its full share of the total fixed and variable cost.

Answer 1

Sell their products at lower net prices abroad than in the domestic market

Step-by-step explanation:

Variable costing is a product costing method where only the variable manufacturing cost like the cost of direct materials ,labor and the variable manufacturing overhead are factored into the cost of production. This does not consider a complete cost like the absorption method of costing and as a result , the final overall cost is lower,

Using variable cost males it possible to sell products at lower net prices abroad compared to the domestics market as the tax laws of various country requires absorption method , hence it is not captures using variable costing.