Under absorption costing, which of the following costs would not be included in finished goods inventory?
A)hourly wages of assembly worker
B)straight-line depreciation on factory equipment
C)overtime wages paid to factory workers
D)the salaries for salespeople

Question

Quizplus · Accepted Answer

The salaries for salespeople are not included in finished goods inventory under absorption costing because they are period costs. Period costs are expensed in the period in which they are incurred, rather than being capitalized as part of the cost of inventory.

Under Absorption Costing, Which of the Following Costs Would Not