In full costing, when does fixed manufacturing overhead become an expense?
A)In the period when all other fixed costs are expensed
B)In the period when the product is sold
C)In the period when the expense is incurred
D)At the time units when are produced

Question

Quizplus · Accepted Answer

In full costing, fixed manufacturing overhead is allocated to the product as a cost of production. It becomes an expense in the period when the product is sold, as it is included in the cost of goods sold (COGS) calculation. Therefore, the correct answer is B.

In Full Costing, When Does Fixed Manufacturing Overhead Become an Expense