Is Not an Inventoriable Cost Under Variable Costing

question 73

Multiple Choice

is not an inventoriable cost under variable costing.

• A) Variable selling and administrative expenses
• B) Variable manufacturing overhead
• C) Direct materials
• D) All of these answers are correct.

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Definitions:

Raw Materials

The basic materials from which products are made, typically unprocessed or minimally processed before being used in manufacturing processes.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs.

Fixed Costs

Expenses that do not change in total regardless of the level of production or sales activity, such as rent, salaries, and insurance.

Marginal Costs

The additional cost incurred by producing one extra unit of a product or service.