A Basic Concept of Variable Costing Is That Period Costs

question 29

Multiple Choice

A basic concept of variable costing is that period costs should be currently expensed.What is the rationale behind this procedure?

• A)Period costs are uncontrollable and should not be charged to a specific product.
• B)Period costs are generally immaterial in amount and the cost of assigning the amounts to specific products would outweigh the benefits.
• C)Allocation of period costs is arbitrary at best and could lead to erroneous decision by management.
• D)Because period costs will occur whether production occurs,it is improper to allocate these costs to production and defer a current cost of doing business.