Under variable costing, which of the following costs would not be included in finished goods inventory?
A)direct labor cost
B)direct materials cost
C)variable factory overhead cost
D)fixed factory overhead cost

Question

Quizplus · Accepted Answer

Under variable costing, only variable costs (direct labor, direct materials, and variable factory overhead) are included in the cost of finished goods inventory. Fixed factory overhead costs are treated as period costs and expensed in the period incurred, not included in inventory costs.

Under Variable Costing, Which of the Following Costs Would Not