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A. The table that follows denotes selected characteristics of absorption costing and/or variable costing Characteristic Absorption Costing Variable Costing Product cost: Direct materials Direct labor
A. The table that follows denotes selected characteristics of absorption costing and/or variable costing Characteristic Absorption Costing Variable Costing Product cost: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Period cost: Variable selling and administrative cost Fixed selling and administrative cost Fixed manufacturing overhead Income statement disclosure/audience: Gross margin Contribution margin Lower net income when inventories rise External financial-statement users Required: Evaluate each product-cost, period-cost, and income-statement/disclosure characteristic and determine whether it relates to absorption costing, variable costing, or both methods. Place an "X" in the proper column
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