Under variable costing, product cost does not contain any fixed manufacturing overhead cost.

Question

Quizplus · Accepted Answer

Variable costing only includes variable manufacturing costs such as direct materials, direct labor, and variable manufacturing overhead in product cost. Fixed manufacturing overhead costs are expensed in the period they are incurred and do not become part of product cost until they are allocated or absorbed through absorption costing.

Under Variable Costing, Product Cost Does Not Contain Any Fixed