The primary difference between variable costing and absorption costing is the accounting for ________.
A)variable costs
B)variable selling expenses
C)fixed selling expenses
D)fixed manufacturing overhead

Question

Quizplus · Accepted Answer

The primary difference between variable costing and absorption costing lies in the accounting for fixed manufacturing overhead costs. Under variable costing, fixed manufacturing overhead costs are treated as period expenses and are deducted from period income as they are incurred. In contrast, under absorption costing, fixed manufacturing overhead costs are absorbed into the cost of goods sold and are only expensed when units are sold. The treatment of variable costs, variable selling expenses, and fixed selling expenses is similar under both costing methods.

The Primary Difference Between Variable Costing and Absorption Costing Is