Which statement is correct about overhead?
A)Fixed overhead is expensed under absorption costing.
B)Fixed overhead is never capitalized.
C)Variable overhead is always capitalized.
D)Fixed overhead is capitalized under absorption costing.

Question

Quizplus · Accepted Answer

Under absorption costing, both fixed and variable overhead are capitalized into the cost of inventory. Therefore, fixed overhead is capitalized, not expensed.

Which Statement Is Correct About Overhead