The only difference between absorption costing and variable costing is the treatment of
A)All variable costs.
B)Variable overhead costs.
C)All fixed costs.
D)Fixed overhead costs.

Question

Quizplus · Accepted Answer

The only difference between absorption costing and variable costing is the treatment of fixed overhead costs. In absorption costing, fixed overhead costs are included in product costs and are allocated to units of production based on the level of production. In variable costing, fixed overhead costs are not included in product costs and are treated as period costs, expensed in the period in which they are incurred. All other costs, whether variable or fixed, are treated the same way in both methods.

The Only Difference Between Absorption Costing and Variable Costing Is