Under absorption costing, which of the following is not considered a product cost?
A) Direct labor
B) Fixed manufacturing overhead
C) Variable manufacturing overhead
D) Administrative costs

Question

Quizplus · Accepted Answer

Administrative costs are not considered a product cost under absorption costing. Product costs include direct materials, direct labor, and both fixed and variable manufacturing overhead costs. Administrative costs are typically classified as period costs and are expensed in the period incurred, rather than being allocated to the cost of a specific product.

Under Absorption Costing, Which of the Following Is Not Considered