What Factor,related to Manufacturing Costs,causes the Difference in Net Earnings

question 59

Multiple Choice

What factor,related to manufacturing costs,causes the difference in net earnings computed using absorption costing and net earnings computed using variable costing?

• A)Absorption costing considers all costs in the determination of net earnings,whereas variable costing considers fixed costs to be period costs.
• B)Absorption costing allocates fixed overhead costs between cost of goods sold and inventories,and variable costing considers all fixed costs to be period costs.
• C)Absorption costing "inventories" all direct costs,but variable costing considers direct costs to be period costs.
• D)Absorption costing "inventories" all fixed costs for the period in ending finished goods inventory,but variable costing expenses all fixed costs.

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