Which of the following is true of absorption costing?
A) It assigns all manufacturing costs to the product.
B) It is used only for internal reporting such as financial statements.
C) It assigns only variable manufacturing costs to the product.
D) None of these.

Question

Quizplus · Accepted Answer

Absorption costing assigns all manufacturing costs, including fixed and variable costs, to the product. It is used for both internal reporting and external financial statements. Option C is false as absorption costing assigns both variable and fixed manufacturing costs to the product.

Which of the Following Is True of Absorption Costing