For external reporting purposes,how are fixed manufacturing costs treated?

Question

Quizplus · Accepted Answer

Fixed manufacturing costs are considered product costs and should be included in the value of inventory until the products are sold. Once sold, the costs are expensed as Cost of Goods Sold in the period in which the sale occurs. Therefore, D is the correct choice as it states that fixed manufacturing costs should be treated as product costs and included in the value of inventory.

For External Reporting Purposes,how Are Fixed Manufacturing Costs Treated