The main difference between variable costing and absorption costing is the way in which fixed manufacturing costs are accounted for.

Question

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Variable costing only includes variable costs in the cost of goods sold, while fixed manufacturing costs are treated as period costs and are expensed in the period incurred. Absorption costing, on the other hand, includes both variable and fixed manufacturing costs in the cost of goods sold.

The Main Difference Between Variable Costing and Absorption Costing Is