The variable-costing method does not include fixed overhead costs in a product's costs.

Question

Quizplus · Accepted Answer

Variable-costing (also known as direct costing) only includes variable costs in a product's costs, such as direct materials, direct labor, and variable overhead. Fixed overhead costs are treated as period costs and are expensed in the period in which they are incurred. This is in contrast to absorption costing, which includes both variable and fixed overhead costs in a product's costs.

The Variable-Costing Method Does Not Include Fixed Overhead Costs in a Product's