Which of the following statements pertain to variable costing?
A) This method must be used for external financial reporting.
B) Fixed manufacturing overhead is attached to each unit produced.
C) The income statement not does disclose a company's contribution margin.
D) Variable manufacturing overhead becomes part of a unit's cost.
E) None of the other answers are correct.

Question

Quizplus · Accepted Answer

Variable costing assigns only variable manufacturing costs to units produced, so variable manufacturing overhead becomes part of a unit's cost. None of the other statements are true for variable costing; A is incorrect as variable costing can be used for both internal and external reporting, B is incorrect as fixed manufacturing overhead is expensed as a period cost, C is incorrect as the income statement for variable costing does disclose contribution margin.

Which of the Following Statements Pertain to Variable Costing