Asked by Autumn Lewis on Apr 25, 2024
Under variable costing,product costs consist of direct labor,direct materials,and variable overhead.
Variable Costing
Variable costing is an accounting method in which only variable production costs (direct materials, direct labor, and variable manufacturing overhead) are included in the cost of goods sold, with fixed overhead expenses treated as period costs.
Variable Overhead
The overhead costs that fluctuate with the level of production activity, such as utilities and materials used in production.
Product Costs
The costs directly associated with the production of goods, including materials, labor, and manufacturing overhead.
- Elucidate the differences in how absorption and variable costing approaches treat costs and report income.
Learning Objectives
- Elucidate the differences in how absorption and variable costing approaches treat costs and report income.
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