Explain the authors statement under an accounting system


Review the article Idle Capacity Costs: It Isn't Just the Expense.

Explain the authors' statement: "Under an accounting system that assigns excess capacity costs to current production and an incentive system that rewards short-term decision making, companies produce more vehicles than they can sell." ? How does the authors' proposal for additional disclosure reconcile GAAP vs. Non-GAAP

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Cost Accounting: Explain the authors statement under an accounting system
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