Under variable costing, ﬁxed manufacturing overhead is:
A)expensed immediately when incurred.
B)never expensed.
C)applied directly to Finished-Goods Inventory.
D)applied directly to Work-in-Process Inventory.
E)treated in the same manner as variable manufacturing overhead.

Question

Quizplus · Accepted Answer

Under variable costing, fixed manufacturing overhead is expensed immediately when incurred. This means that it is included in the period's expenses rather than being added to the cost of the product. This is because variable costing only applies direct materials, direct labor, and variable manufacturing overhead to the cost of the product.

Under Variable Costing, ﬁXed Manufacturing Overhead Is