If a firm uses variable costing,fixed manufacturing overhead will be included
A)only on the balance sheet.
B)only on the income statement.
C)on both the balance sheet and income statement.
D)on neither the balance sheet nor income statement.

Question

Quizplus · Accepted Answer

In variable costing, fixed manufacturing overhead is expensed as a period cost and is included in the calculation of cost of goods sold on the income statement. It is not included on the balance sheet as an inventory cost since it is not allocated to units produced under this costing method. Therefore, fixed manufacturing overhead will only be included on the income statement.

If a Firm Uses Variable Costing,fixed Manufacturing Overhead Will Be