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Variable Costing System
? Eliminates time consuming efforts of allocating fixed overhead to individual products.
? Management's cost control efforts would be enhanced.
? Useful in comparing the profitability of individual product.
? Avoids the complexities associated with manufacturing overhead.
? Removes fixed manufacturing overhead and teats it as a period cost and not as a product cost.
? Helps managers understand h manufacturing costs are being incurred
? Very valuable tool for management in making decision and often use for internal reports.
? Income figure is not affected by production thus overproduction can be prevented...
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