Under variable costing, which of the following costs would be included in finished goods inventory?

A) neither variable nor fixed factory overhead cost
B) both variable and fixed factory overhead cost
C) only variable factory overhead cost
D) only fixed factory overhead cost

Variable Costing

A costing method in which variable manufacturing costs are included in product costs, while fixed manufacturing costs are treated as period expenses.

Fixed Factory Overhead

Indirect manufacturing costs that remain constant regardless of the level of production, such as rent, insurance, and salaries of certain managers.