A Basic Tenet of Variable Costing Is That Fixed Manufacturing

question 255

Multiple Choice

A basic tenet of variable costing is that fixed manufacturing overhead costs be currently expensed. What is the rationale behind this?

• A)Fixed manufacturing overhead costs are generally immaterial in amount.
• B)Fixed manufacturing overhead costs occur regardless of level of production.
• C)Allocation of fixed manufacturing costs are arbitrary at best.
• D)Fixed manufacturing costs change as production changes.

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