The basic assumption made in a variable costing system with respect to fixed costs is that all fixed costs are:
A)Sunk costs.
B)Product costs.
C)Fixed as to the total cost.
D)Period costs.

Question

Quizplus · Accepted Answer

In a variable costing system, fixed costs are considered to be period costs, meaning that they are expensed in the period in which they are incurred rather than being allocated to products as part of the cost of goods sold. Therefore, choice D - period costs - is the correct answer.

The Basic Assumption Made in a Variable Costing System with Respect