The difference between variable costing and full absorption costing is due to differences in the treatment of:
A)direct costs.
B)variable manufacturing overhead.
C)fixed manufacturing overhead.
D)period costs.

Question

Quizplus · Accepted Answer

The difference between variable costing and full absorption costing is due to the treatment of fixed manufacturing overhead costs. In variable costing, fixed overhead costs are treated as period costs and are not included in the cost of goods sold. In full absorption costing, fixed overhead costs are included in the cost of goods sold along with direct materials, direct labor, and variable manufacturing overhead costs. Therefore, choice (C) fixed manufacturing overhead is the best answer.

The Difference Between Variable Costing and Full Absorption Costing Is