In manufacturing companies, the variable costing method is also classified as _________?
Correct answer: A. direct costing
- A. direct costing
- B. indirect costing
- C. total costing
- D. One factor costing
Explanation
Variable costing is also called direct costing because only variable manufacturing costs are assigned to products, while fixed manufacturing overhead is expensed in the period incurred. The term does not mean that all included costs are direct costs.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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