All differences between super-variable costing and absorption costing are explained by: A. the accounting for direct materials and manufacturing overhead costs. B. the accounting for direct labor and direct materials. C. the accounting for direct labor and manufacturing overhead costs. D. the accounting for manufacturing overhead costs.

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Business

Luka Waller

19 May, 04:27

All differences between super-variable costing and absorption costing are explained by: A. the accounting for direct materials and manufacturing overhead costs. B. the accounting for direct labor and direct materials. C. the accounting for direct labor and manufacturing overhead costs. D. the accounting for manufacturing overhead costs.

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Erik Lucas · Answer 1

D. the accounting for manufacturing overhead costs.

Explanation:

Unver variable cost are treated as period expenses, which means they are not capitalize on inventory, overhead expenses are expenses in their full amount.

While underabsorption costing it is captialized, which means unit cost are higher, increasing inventory account and decreasing the expenses of the period when the production is higher than sales which is usually common situation.