Which of the following statements is false regarding variable costing?
A) Variable overhead is treated as a product cost.
B) Variable costing is required for external financial statements prepared in accordance with generally accepted accounting principles (GAAP).
C) Fixed overhead is treated as a period cost.
D) Period costs are expensed as they are incurred.

Question

Quizplus · Accepted Answer

Variable costing is not required for external financial statements prepared in accordance with generally accepted accounting principles (GAAP). In fact, GAAP allows for both variable and absorption costing methods to be used for external financial reporting purposes.

Which of the Following Statements Is False Regarding Variable Costing