Absorption costing differs from variable costing in all of the following except
A)treatment of fixed manufacturing overhead.
B)treatment of variable production costs.
C)acceptability for external reporting.
D)arrangement of the income statement.

Question

Quizplus · Accepted Answer

Variable production costs are treated the same in both absorption costing and variable costing, as both methods include all variable costs in the cost of goods sold. The difference lies in the treatment of fixed manufacturing overhead, external reporting acceptability, and the income statement arrangement.

Absorption Costing Differs from Variable Costing in All of the Following