Which of the following relates to absorption costing?
A)Treats direct manufacturing costs as a period cost
B)Includes fixed manufacturing overhead as an inventoriable cost
C)Expenses marketing costs as cost of goods sold
D)Is required for internal reports to managers

Question

Quizplus · Accepted Answer

Absorption costing includes fixed manufacturing overhead as an inventoriable cost, meaning it is included in the cost of goods sold. Option A is incorrect because absorption costing treats direct manufacturing costs as a product cost, not a period cost. Option C is incorrect because absorption costing only includes costs incurred in the manufacturing process, not marketing costs. Option D may or may not be true, as absorption costing can be used for both internal and external reporting purposes.

Which of the Following Relates to Absorption Costing