Under variable costing
A)only the quantity of products sold determines cost of goods sold.
B)only the quantity of products produced determines cost of goods sold.
C)both the quantity of products produced and sold determines cost of goods sold.
D)neither the quantity of products produced or sold determines cost of goods sold.

Question

Quizplus · Accepted Answer

Under variable costing, only the quantity of products sold determines the cost of goods sold. This is because variable costing considers only the direct costs (variable costs) of producing a product, such as materials and direct labor, that vary with the level of output. Fixed costs, such as rent and salaries, are considered as period expenses and are not included in the cost of goods sold. Therefore, the cost of goods sold is calculated as the variable cost per unit multiplied by the number of units sold.

Under Variable Costing