Question: You have studied the two costing methods and the cost equation. Please answer two of the following related questions:
1. Discuss the differences between variable costing and absorption costing.
2. Why is it important to understand a products cost equation?
3. Does a products cost equation change throughout its lifecycle? if so, why?
4. Which method is accepted by GAAP? why do you think this method was selected?
5. Find an article dealing with the cost equation and share with the class,. Add your thoughts on the significance of the information.
6. Share a personal experience where the variable and fixed costs influenced a decision you had to make. Include what-if or contingency analysis involved.