Under variable costing, which of the following costs would be included in finished goods inventory?
A)neither variable nor fixed factory overhead cost
B)both variable and fixed factory overhead cost
C)only variable factory overhead cost
D)only fixed factory overhead cost

Question

Quizplus · Accepted Answer

Under variable costing, only variable costs are included in the cost of inventory. This includes direct materials, direct labor, and variable manufacturing overhead. Fixed manufacturing overhead is treated as a period cost and expensed in the period incurred, not included in the cost of inventory.

Under Variable Costing, Which of the Following Costs Would Be