Copyright

Which of the following best describes costs assigned to the product under the variable costing...

Question:

Which of the following best describes costs assigned to the product under the variable costing method?

Direct labor (DL)

Direct materials (DM)

Variable selling and administrative

Variable manufacturing overhead

Fixed selling and administrative

Fixed manufacturing overhead

a. DL, DM, variable selling and administrative costs, and variable manufacturing overhead.

b. DL, DM, and variable manufacturing overhead.

c. DL, DM, variable manufacturing overhead, and fixed manufacturing overhead.

d. DL and DM.

e. DL, DM, fixed selling and administrative, and fixed manufacturing overhead.

What Are Variable Costs:

Companies usually incur a mix of fixed and Variable Costs in their production process. Variable Costs are those that will vary based on the amount of units produced. Examples include direct materials used and direct labor wages.

Answer and Explanation:

The answer is B.

  • Fixed costs are excluded under variable costing while selling and administrative expenses are not product costs in nature (i.e. they are period costs).

Learn more about this topic:

Loading...
Variable Costing: Method, Formula & Advantages

from Financial Accounting: Help and Review

Chapter 13 / Lesson 5
2.8K

Related to this Question

Explore our homework questions and answers library