Tour #1: Malloy Lithographing, Inc.

Rating: ****

Company Overview: A manufacturer of books.

Managerial Accounting Topic(s): batch manufacturing

Web Site: www.malloy.com

To Take the Tour: From the home page, select the site index then click on “Plant Tour”

Question : What is the one cost that is treated differently between Absorption and Variable Costing? Based on the virtual tour identify possible specific costs at Malloy that would be treated differently between the two methods. Also, state one reason to justify using variable costing for internal decision making. Which is the ONLY method allowed for external reporting according to GAAP?