Which of the following statements is false regarding absorption costing?
A)Variable overhead is treated as a product cost.
B)Fixed overhead is treated as a product cost.
C)Fixed overhead is expensed in the period incurred.
D)Absorption costing is required for tax purposes.
E)Absorption costing is required for external ﬁnancial statements prepared in accordance with generally

Question

Quizplus · Accepted Answer

Fixed overhead is treated as a product cost under absorption costing, and is therefore included in the cost of goods sold. It is not expensed in the period incurred as it would be under variable costing.

Which of the Following Statements Is False Regarding Absorption Costing