1.Why would you recommend variable costing as a better means to report operating income?

Variable Costing Variable costing is an alternative for internal management reports. Under variable costing, product costs include only the variable manufacturing costs: Direct Material Direct Labor (unless fixed Variable manufacturing over head. Under variable costing, the follo!ing costs are treated as period expenses and are excluded from product costs: "ixed manufacturing overhead. Variable selling administrative costs. "ixed selling and administrative costs. Operating income: #perating income is a profit reali$ed from a business operation after all the expenses cost of goods sold or !ages % and depreciation. #perating income ta&es the gross income and deducted other expenses. 'hese operating expenses are costs !hich are incurred from operating activities of business and include office supplies and po!er. #perating (ncome is typically for earnings before interest and taxes and is also commonly as )operating profit) or )recurring profit). While comparing both the costing variable costing usually produce different net operating income figures this difference needs to separate income statements that will cost different income figures.

*****************************************************************

+. ( !ill prefer ,#( ,#( is to measure the -conomic Value of .erformance 'he person does not have cash, buildings, or e/uipment and are the lifeblood of any business enterprise. 'here has never been a reliable !ay to /uantify the contribution of human capital to corporate profit. 'his !ill offer a rare blend of management expertise and /uantitative metrics, sho!ing executives and 0, professionals ho! to gauge human costs and productivity at three critical levels: 1 #rgani$ational (contributions to corporate goals 2 + "unctional (impact on process improvement 2 3 0uman resources management (value added by five basic 0, department activities . 'his is a resource that reveals ho! to do it and that helps managers determine ho! to invest most effectively in human productive potential. ******************************************************************