Absorption costing treats fixed manufacturing overhead costs as product costs.

Name: Absorption costing treats fixed manufacturing overhead costs as product costs.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Absorption costing includes fixed manufacturing overhead costs as a product cost, along with direct materials, direct labor, and variable overhead costs. This means that the cost of each unit includes a portion of the fixed overhead expenses, which can lead to higher reported profits when more units are produced and sold.

Absorption Costing Treats Fixed Manufacturing Overhead Costs as Product Costs