Which of the following costs at a sofa manufacturing company would be treated as a period cost under the variable costing method?
A) the cost of glue used to assemble the wood frame of each sofa produced
B) depreciation on sales vehicles
C) the salary of a factory manager
D) both B and C above

Question

Quizplus · Accepted Answer

Under the variable costing method, only variable manufacturing costs are treated as product costs and included in the cost of goods sold. Fixed manufacturing costs and all non-manufacturing costs are treated as period costs and expensed in the period they are incurred. Depreciation on sales vehicles and the salary of a factory manager are both fixed non-manufacturing costs and would be treated as period costs under variable costing. The cost of glue used to assemble the wood frame of each sofa produced is a variable manufacturing cost and would be treated as a product cost under variable costing.

Which of the Following Costs at a Sofa Manufacturing Company