Direct costing differs from absorption costing in that
A)under absorption costing all fixed manufacturing overhead is expensed in the current period.
B)under direct costing all fixed overhead is expensed in the current period.
C)under direct costing a portion of the fixed manufacturing overhead is included in the finished goods inventory.
D)under absorption costing an increase in finished goods inventory does not affect the amount of fixed costs expensed.

Question

Quizplus · Accepted Answer

Under direct costing, also known as variable costing, all fixed manufacturing overhead is expensed in the current period rather than being allocated to inventory.

Direct Costing Differs from Absorption Costing in That