Question

Identify the true statement about variable costing. a. It treats fixed manufacturing overhead as a period cost. b. It is the most acceptable product-costing method for external reporting, c. It assigns all manufacturing costs to the product. Od. It treats fixed selling overhead as a product cost.

Answer 1

solution-3 option (d) is correct. Direct Material Cost car is an of variable Costing. example solution - 4) option (b) is brrect, For planning and Control purposes, all types of lost whether it is variable or fixed are taken into Consideration, mixed costs are those Costs which containe both fired and Variable Component.

Problem H3 (solution/ a) Calculation of closing inventory (in units) 24000 Add! hess! opening inventory units produced units sold Virg 20,000 4,000 unit inventory

1 Calculation of the value of Inventory under variable Costing - 140,000 → 240,000 → Direct Material (4000 units X $35) Direct labour (4000 unit x $60) variable overhead (4000 unit x $30) value of legt of closing inventory option (6) is correct. 120,000 500,000

option (a) It Solution - 1) treats fixed manufacturing overhead as a period Costo In variable Costing technique, only Variable costs are considered product Costs and fixed overheads are Considered as period Cost Hence, Fixed manufacturing overhead is - Hlated as period lost in variable Costing technique