Under absorption costing, SL depreciation on production equipment is included with the inventoriable cost; but, under variable costing, it is not.
When adopting absorption costing, which of the following costs are inventoried?
- All production costs that are variable and those that are ixed are regarded as inventoriable costs in absorption costing.
- Term in this set (56) Product expenses under variable costing are made up of direct labor, direct materials, and variable manufacturing overhead. Fixed manufacturing overhead is considered a product cost in the absorption costing method.
- 7-2 Under both absorption costing and variable costing, selling and administrative costs are regarded as period costs. 7-3 Along with direct materials, direct labor, and variable manufacturing overhead, absorption costing also includes fixed manufacturing overhead costs in product costs.
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