Absorption costing treats all manufacturing costs as period costs.

Name: Absorption costing treats all manufacturing costs as period costs.
Brand: Quizplus
Rating: 4.9 (58 reviews)

Question

Quizplus · Accepted Answer

Absorption costing considers all manufacturing costs (direct materials, direct labor and variable and fixed overhead) as product costs, which are included in the cost of goods sold. It is the variable and fixed overhead costs that can make absorption costing less accurate in allocating product costs.

Absorption Costing Treats All Manufacturing Costs as Period Costs