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The primary difference between variable costing and absorption costing is


(A) in absorption​ costing, fixed selling and administrative costs are product costs.

(B) in variable​ costing, variable selling and administrative costs are product costs.

(C) in variable​ costing, fixed manufacturing overhead is a product cost.

(D) in absorption​ costing, fixed manufacturing overhead is a product cost.

Respuesta :

Answer:

The correct answer is letter "D": in absorption​ costing, fixed manufacturing overhead is a product cost.

Explanation:

Absorption costing or full costing includes all costs related to the production process like the fixed costs. Variable costing, on the other hand, only includes the variable costs from the production. Absorption costing incorporates allocating fixed overhead costs of each unit produced during a certain period.

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