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Why is this marked incorrectly? I found the e-book excerpt about variable costing, while absorption costing states Both fixed and variable factory costs are included
Why is this marked incorrectly?
I found the e-book excerpt about variable costing, while absorption costing states "Both fixed and variable factory costs are included as part of factory overhead. In the financial statements, these costs are included in the cost of goods sold (income statement) and inventory (balance sheet)."
Is this a trick question or is there more?
Thank you for your time.
What term is commonly used to describe the concept whereby the cost of manufactured products is composed of direct materials cost, direct labor cost, and variable factory overhead cost? a. Differential costing b. Variable costing Absorption costing C. Od. Standard costing Feedback Check My Work Incorrect 20-1b Variable Costing For internal use in decision making, managers often use variable costing. Under variable costing, sometimes called direct costing, the cost of goods manufactured includes only variable manufacturing costs. Thus, the cost of goods manufactured consists of the following: Direct materials Direct labor Variable factory overhead Under variable costing, fixed factory overhead costs are not a part of the cost of goods manufactured. Instead, fixed factory overhead costs are treated as period expense. Exhibit 1 illustrates the differences between absorption costing and variable costingStep by Step Solution
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