What is the central theoretical issue in the variable costing debate?
A)the issue of how to differentiate between manufacturing and non-manufacturing costs
B)the issue of whether or not fixed manufacturing costs add value to products.
C)the issue of identifying which units were sold out of inventory.
D)the issue of identifying which costs vary with activities.

Question

Quizplus · Accepted Answer

The central theoretical issue in the variable costing debate is whether or not fixed manufacturing costs should be included as a cost of production or expensed immediately as period costs. Those who argue for including fixed costs believe that they add value to the products being produced, while those who argue against it believe that only variable costs should be included in the cost of production.

What Is the Central Theoretical Issue in the Variable Costing