When a company uses absorption costing
A)only fixed costs are inventoried.
B)only variable costs are inventoried.
C)all production costs are inventoried.
D)fixed costs are expensed as incurreD.

Question

Quizplus · Accepted Answer

Absorption costing involves the inventory of all production costs, including both variable and fixed costs. Therefore, option C is the correct answer. Option A is incorrect as it states only fixed costs are inventoried. Option B is incorrect as only variable costs are not sufficient to cover the total cost of producing a product. Option D is incorrect as fixed costs are not expensed as incurred, they are included in the inventory cost and expensed when the product is sold.

When a Company Uses Absorption Costing