The difference between absorption manufacturing cost and total cost with respect to product pricing is caused by:
A)variable manufacturing cost.
B)applied fixed manufacturing cost.
C)variable selling and administrative cost.
D)allocated fixed selling and administrative cost.
E)choices "C" and "D" abovE.

Question

Quizplus · Accepted Answer

Absorption manufacturing cost includes all manufacturing costs (both fixed and variable), while total cost includes both manufacturing and non-manufacturing costs (selling and administrative). Therefore, the difference is due to the variable and fixed selling and administrative costs.

The Difference Between Absorption Manufacturing Cost and Total Cost with Respect