Why is variable costing not in accordance with generally accepted accounting principles?
A)Fixed manufacturing costs are treated as period costs under variable costing.
B)Variable costing procedures are not well known in industry.
C)Net earnings are always overstated when using variable costing procedures.
D)Variable costing ignores the concept of lower of cost or market when valuing inventory.

Question

Quizplus · Accepted Answer

Fixed manufacturing costs are treated as period costs under variable costing, which is not in accordance with generally accepted accounting principles that require them to be included in the cost of the product.

Why Is Variable Costing Not in Accordance with Generally Accepted