Direct material and direct labor costs are assigned to inventory when using I Absorption costing
II Throughput costing
III Variable costing
A) I and III only
B) I and II only
C) II and III only
D) I, II, and III

Question

Quizplus · Accepted Answer

Absorption costing assigns both direct material and direct labor costs to inventory. Variable costing also assigns these costs to inventory, but throughput costing does not assign direct labor to inventory, focusing only on direct materials.

Direct Material and Direct Labor Costs Are Assigned to Inventory