Which of the following best describes costs assigned to the product under the absorption costing method?
Direct labor (DL)
Direct materials (DM)
Variable selling and administrative
Variable manufacturing overhead
Fixed selling and administrative
Fixed manufacturing overhead
A) DL, DM, variable selling and administrative costs, and variable manufacturing overhead.
B) DL, DM, and variable manufacturing overhead.
C) DL, DM, variable manufacturing overhead, and fixed manufacturing overhead.
D) DL and DM.
E) DL, DM, fixed selling and administrative, and fixed manufacturing overhead.

Question

Quizplus · Accepted Answer

Absorption costing assigns all direct costs (DL and DM) and all manufacturing overhead costs (both fixed and variable) to the product. Variable selling and administrative costs are typically expensed in the period they are incurred and not assigned to the product. Fixed selling and administrative costs are also not assigned to the product and are treated as period expenses.

Which of the Following Best Describes Costs Assigned to the Product