A downside to absorption costing is: a. not including fixed manufacturing overhead in the cost of the product
b. that it is not really useful for managerial decisions
c. that it is not allowable under GAAP
d. that it is not well designed for cost-volume-profit analysis

that it is not well designed for cost-volume-profit analysis

Explanation:

Absorption costing refers to the managerial accounting method that is used for capturing all the costs that are associated with the manufacturing of a product. In this case, the direct costs and the indirect costs are all accounted for through the use of this method.

Some of the downside to absorption costing include the fact that it isn't

helpful in a scenario whereby improvement in the financial and operational efficiency is to be analysed. Also, the true reflection of the profit of a business may not be given and it is not well designed for cost-volume-profit analysis.

Therefore, the correct option is D.

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