The method of costing that excludes fixed manufacturing costs from inventoriable costs is known as
A)absorption costing.
B)fixed overhead costing.
C)manufacturing overhead costing.
D)variable costing.
E)full manufacturing costing.

Question

Quizplus · Accepted Answer

The method of costing that excludes fixed manufacturing costs from inventoriable costs is known as variable costing. Under variable costing, only direct costs (such as direct materials, direct labor, and variable manufacturing overhead) are included in the cost of a product, while fixed manufacturing costs are expensed in the period they are incurred. This approach allows for a better understanding of the cost behavior of a product and its impact on profitability.

The Method of Costing That Excludes Fixed Manufacturing Costs from Inventoriable