Under unit-variable costing,
A)companies can increase income by increasing the number of units produced
B)all product and period costs are included in cost of goods sold
C)only costs that vary per unit are included in cost of goods sold
D)only direct material costs are included in cost of goods sold

Question

Quizplus · Accepted Answer

Under unit-variable costing, only costs that vary per unit (direct materials, direct labor, and variable manufacturing overhead) are included in cost of goods sold. Fixed manufacturing overhead costs are treated as period costs and are expensed in the period incurred. Therefore, Choice C is correct. Choices A, B, and D are incorrect as they do not accurately describe unit-variable costing.

Under Unit-Variable Costing