Which of the following statements is true? Multiple Choice

Variable costing treats fixed overhead as a period cost.

Absorption costing treats fixed overhead as a period cost.

Absorption costing treats fixed overhead as an expense in the period it is incurred.

Variable costing excludes all overhead from product costs.

Question

Business

Lilianna Rodgers

8 June, 10:22

Which of the following statements is true? Multiple Choice

Variable costing treats fixed overhead as a period cost.

Absorption costing treats fixed overhead as a period cost.

Absorption costing treats fixed overhead as an expense in the period it is incurred.

Variable costing excludes all overhead from product costs.

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Answers (1)

Know the Answer?

Finley · Answer 1

Answer: Variable costing treats fixed overhead as a period cost.

Explanation:

The variable costing system is the process which included all the variable like the production cost and the direct labor. The cost are used as the period cost in the fixed overhead and they are charge in terms of the income in the variable costing. And in this method the product cost are not used as the fixed overhead but it is used as the period cost.