Under variable costing,the impact of both fixed manufacturing and non-manufacturing cost is emphasized because the total amount of such cost for the period appears in the income statement.

Question

Quizplus · Accepted Answer

Variable costing only includes variable manufacturing costs in the cost of goods sold and any fixed manufacturing costs are treated as period expenses and are not included. However, under variable costing, fixed non-manufacturing costs such as rent, salaries, and marketing expenses are expensed in the period they are incurred and appear in the income statement, hence the impact of both fixed manufacturing and non-manufacturing costs is emphasized.

Under Variable Costing,the Impact of Both Fixed Manufacturing and Non-Manufacturing