Under both variable costing and absorption costing,all variable manufacturing costs are inventoriable costs and all non-manufacturing costs in the value chain (e.g.R&D,marketing),whether variable or fixed,are period costs and are recorded as expenses when incurred.

Question

Quizplus · Accepted Answer

Both variable costing and absorption costing treat all variable manufacturing costs as inventoriable costs, meaning they are included in the cost of inventory and recognized as cost of goods sold when the inventory is sold. Both methods also treat non-manufacturing costs, regardless of whether they are variable or fixed, as period costs, which means they are expensed in the period they are incurred.

Under Both Variable Costing and Absorption Costing,all Variable Manufacturing Costs