Under absorption costing,the income statement is organized by:

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Under absorption costing, both product costs (such as direct materials, direct labor, and manufacturing overhead) and period costs (such as selling, general, and administrative expenses) are included in the income statement. This is because absorption costing assigns a portion of fixed manufacturing overhead to each unit of product, so those costs are considered part of the cost of goods sold. Therefore, the income statement includes both product and period costs.

Under Absorption Costing,the Income Statement Is Organized By