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If a firm uses absorption costing, which of the following actions taken by management would increase gross profit even if sales do not increase?a) Decreasing production and using items from inventory for sales.b) Increasing production and building up inventoryc) Increasing fixed costs by investing in new production technology.d) Increasing variable costs by purchasing higher-quality materials.

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If a firm uses absorption costing, which of the following actions taken by management would increase gross profit even if sales do not increase .b) Increasing production and building up inventory.

What is absorption costing in management accounting?

A managerial accounting technique known as "absorption costing," also known as "full costing," is used to record all expenses related to producing a specific product. This strategy accounts for both direct and indirect costs, including direct materials, direct labor, rent, and insurance.

Absorption costing's key benefit is that it complies with GAAP and records profits more precisely than variable costing. In contrast to variable costing, which solely takes into account variable costs, absorption costing accounts for all production expenses.

To know more about absorption costing, refer:

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