Which Statement Is Correct About Variable Costing

question 12

Multiple Choice

Which statement is correct about variable costing?

• A)Under this method, fixed overhead is considered a product cost because production cannot take place without these costs.
• B)Under this method, fixed overhead is considered a period cost because such costs do not vary according to production level.
• C)Under this method, variable overhead is considered a period cost because production cannot take place without these costs.
• D)Under this method, selling costs are considered a product cost because production cannot take place without these costs.

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Definitions:

Merchandise Inventory

The value of a company's goods that are ready for sale to customers during an accounting period.

Increases Assets

Transactions or events that enhance the economic resources controlled by a business.

Purchase Requisition

An internal document used within an organization to request authorization for a purchase before a purchase order is issued.