The absorption costing method is required for external financial reporting.

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Elizabeth Smith · Accepted Answer

Final Answer : True, Explanation :  The absorption costing method is required for external financial reporting in accordance with generally accepted accounting principles (GAAP) in many countries, including the United States. This method captures all production costs, including direct materials, direct labor, and manufacturing overhead, and assigns them to the cost of goods sold. As a result, it provides a more accurate measure of the full cost of producing an item compared to other costing methods that only allocate some of the costs, such as variable costing.

The absorption costing method is required for external financial reporting.

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