Which of the following statements is true?
A)Variable costing treats fixed overhead as a period cost.
B)Absorption costing treats fixed overhead as a period cost.
C)Absorption costing treats fixed overhead as an expense in the period it is incurred.
D)Variable costing excludes all overhead from product costs.
E)Managers can manipulate earnings more easily under variable costing by varying the production level.

Question

Quizplus · Accepted Answer

Variable costing treats fixed overhead as a period cost and excludes it from product costs, while absorption costing treats fixed overhead as a product cost and includes it in the cost of goods sold.

Which of the Following Statements Is True