Which of the following statements is false regarding variable costing?
A) Variable overhead is treated as a product cost.
B) Variable costing is required for external financial statements prepared in accordance with generally accepted accounting principles (GAAP).
C) Fixed manufacturing overhead is treated as a period cost.
D) Period costs are expensed as they are incurred.

Question

Quizplus · Accepted Answer

Variable costing is not a required method for external financial statements prepared in accordance with GAAP. However, some companies choose to disclose both variable and absorption costing information in their financial statements.

Which of the Following Statements Is False Regarding Variable Costing