A Basic Tenet of Variable Costing Is That Fixed Manufacturing

question 84

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