Absorption costing income statements
A) Assign only direct material and direct labor costs to inventory
B) Allocate fixed production costs to inventory
C) Treat selling and administrative costs as product costs
D) Treat costs in a similar manner to variable costing income statements

Question

Quizplus · Accepted Answer

Absorption costing allocates all manufacturing costs, including fixed production costs, to inventory, which is different from variable costing that only assigns variable production costs to inventory.

Absorption Costing Income Statements