In variable costing, fixed costs do not become part of the cost of goods manufactured, but they are considered an expense of the period.

Question

Quizplus · Accepted Answer

In variable costing, only variable manufacturing costs are included in the cost of goods manufactured. Fixed manufacturing costs are treated as period expenses and are expensed in the period they are incurred, not as part of the product cost.

In Variable Costing, Fixed Costs Do Not Become Part of the Cost