Absorption costing considers fixed selling and administrative costs as product costs.

Name: Absorption costing considers fixed selling and administrative costs as product costs.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Absorption costing includes all manufacturing costs (both fixed and variable) in the cost of a product, but it does not treat fixed selling and administrative costs as product costs; these are considered period costs and are expensed in the period they are incurred.

Absorption Costing Considers Fixed Selling and Administrative Costs as Product