Asked by Princess Ritsu on Apr 25, 2024
Verified
What costs are treated as product costs under the variable costing method?
Variable Costing
A costing method that only includes variable production costs in product costs, treating fixed manufacturing costs as period expenses.
Product Costs
Costs that are directly tied to the production of goods, including raw materials, direct labor, and manufacturing overhead.
- Differentiate the treatment of costs as product costs within the frameworks of absorption and variable costing approaches.
Verified Answer
BO
Brooke OldfinApr 29, 2024
Final Answer :
Under variable costing,direct labor,direct materials,and variable manufacturing overhead costs are treated as product costs.Fixed manufacturing overhead is treated as a period cost.
Learning Objectives
- Differentiate the treatment of costs as product costs within the frameworks of absorption and variable costing approaches.