Companies recognize fixed manufacturing overhead costs as period costs (expenses) when incurred when using
A) full costing.
B) absorption costing.
C) product costing.
D) variable costing.

Question

Quizplus · Accepted Answer

Fixed manufacturing overhead costs are considered period costs (expenses) under variable costing, as they are not allocated to products but are expensed in the period in which they are incurred. Full costing, absorption costing, and product costing all involve allocating fixed overhead costs to products, and therefore do not treat them as period costs.

Companies Recognize Fixed Manufacturing Overhead Costs as Period Costs (Expenses)