question archive Explain three methods under absorption costing that managers can use to improve operating income
Explain three methods under absorption costing that managers can use to improve operating income
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Explain three methods under absorption costing that managers can use to improve operating income.
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Answer:
1) A plant manager may switch to manufacturing products that absorb the highest amount of fixed manufacturing costs, regardless of the demand for the product.
2) A plant manager may accept a particular order to increase production, even though another plant in the same company may be better suited to handle the order.
3)To increase production, a manager may defer maintenance beyond the current period.
