Variable costing is a method of inventory costing in which all variable manufacturing costs (direct and indirect)are included as:
A)period costs.
B)conversion costs.
C)prime costs.
D)inventoriable costs.

Question

Quizplus · Accepted Answer

Variable costing includes only variable manufacturing costs as inventoriable costs and treats fixed manufacturing costs as period costs. Prime costs refer to direct materials and direct labor, while conversion costs refer to direct labor and manufacturing overhead. Therefore, neither choice A nor B is accurate.

Variable Costing Is a Method of Inventory Costing in Which