A major conceptual difference between throughput costing and variable costing is
A)under variable costing, direct labour and variable manufacturing overhead are charged to income as period expenses.
B)under throughput costing, direct labour and variable manufacturing overhead are deferred in inventory rather than charged to income as period expenses.
C)under throughput costing, direct labour and variable manufacturing overhead are charged to income as period expenses.
D)there are no conceptual differences between the two methods.

Question

Quizplus · Accepted Answer

Throughput costing treats only direct material costs as product costs, while direct labor and variable manufacturing overhead are treated as period expenses, unlike variable costing which includes both direct labor and variable manufacturing overhead as product costs.

A Major Conceptual Difference Between Throughput Costing and Variable Costing