The only difference between absorption costing and variable costing in the determination of product costs is the way fixed manufacturing overhead costs are treated.

Question

Quizplus · Accepted Answer

The statement is true. In absorption costing, fixed manufacturing overhead costs are included in the product cost, while in variable costing, they are treated as period expenses and not allocated to the product cost.

The Only Difference Between Absorption Costing and Variable Costing in the Determination