When variable costing is used,
A)all product costs are considered to be variable.
B)all period costs are considered to be variable.
C)all product costs are considered to be fixed.
D)product costs are separated into fixed and variable components.

Question

Quizplus · Accepted Answer

When variable costing is used, product costs are separated into fixed and variable components. This allows for a better understanding of how changes in production volume affect costs and profitability. Period costs, on the other hand, are expensed as they are incurred and are not included in product costs under variable costing.

When Variable Costing Is Used