Which of the following statements is true?
A)Under variable costing,direct materials and direct labor are expensed as period expenses.
B)Under variable costing,fixed manufacturing overhead is expensed as period expenses.
C)Fixed manufacturing overhead costs are treated the same under both absorption costing and variable costing.
D)Reported income under absorption costing is not affected by production level changes.
E)Under absorption costing,fixed manufacturing overhead is expensed as period expenses.

Question

Quizplus · Accepted Answer

Under variable costing, fixed manufacturing overhead is treated as a period expense, meaning it is expensed in the period it is incurred, rather than being allocated to the cost of goods sold like variable costs (direct materials, direct labor, and variable manufacturing overhead).

Which of the Following Statements Is True