The method of inventory costing, in which all variable and fixed manufacturing cost is considered as inventoriable cost can be termed as __________?
Correct answer: A. absorption costing
- A. absorption costing
- B. variable costing
- C. fixed costing
- D. manufacturing cost
Explanation
Absorption costing treats both variable and fixed manufacturing costs as product costs and includes them in inventory until the goods are sold. Variable costing treats fixed manufacturing overhead as a period expense.
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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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