Managers use variable costing to determine which products to offer and which products to discontinue. Rather than discontinuing a product based on negligible.
Managers use variable costing to determine which products to offer and which products to discontinue. Rather than discontinuing a product based on negligible profits, a manager can use variable costing to determine the overall costs of keeping a unit in production.
Question: Why do organizations use variable costing? Answer: Variable costing provides managers with the information necessary to prepare a contribution margin income statement, which leads to a more effective cost-volume-profit (CVP) analysis.
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