Which statement is correct about variable costing?
A)Under this method, fixed overhead is considered a product cost because production cannot take place without these costs.
B)Under this method, fixed overhead is considered a period cost because such costs do not vary according to production level.
C)Under this method, variable overhead is considered a period cost because production cannot take place without these costs.
D)Under this method, selling costs are considered a product cost because production cannot take place without these costs.

Question

Quizplus · Accepted Answer

Variable costing considers only variable costs as product costs and fixed overhead as a period cost because fixed overhead does not vary with changes in production levels. Selling costs are also considered period costs as they are incurred after the production of goods and are not directly related to the production process.

Which Statement Is Correct About Variable Costing