Under the variable costing method:
A)fixed manufacturing costs are not inventoried.
B)fixed manufacturing costs are inventoried.
C)costs are absorbed into the finished goods inventory.
D)does not distinguish fixed manufacturing costs from variable manufacturing costs.
E)is only useful in long-term decision making processes in manufacturing firms.

Question

Quizplus · Accepted Answer

Under the variable costing method, only variable manufacturing costs are included in the cost of goods sold, while fixed manufacturing costs are expensed as incurred and are not inventoried. This method is useful for short-term decision-making processes and can help companies determine the profitability of individual products or product lines.

Under the Variable Costing Method