Advocates of variable costing argue that * a. fixed production costs should be added to inventory because such costs have future service potential and therefore are inventoriable as an asset. b. fixed production costs should be capitalized as an asset and amortized over future periods when benefits from such costs are expected to be received.
Advocates of variable costing argue that * a. fixed production costs should be added to inventory because such costs have future service potential and therefore are inventoriable as an asset. b. fixed production costs should be capitalized as an asset and amortized over future periods when benefits from such costs are expected to be received.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter8: Tactical Decision-making And Relevant Analysis
Section: Chapter Questions
Problem 2MCQ: Costs that cannot be affected by any future action are called a. differential costs. b. sunk costs....
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Advocates of variable costing argue that *
a. fixed production costs should be added to inventory because such costs have future service potential and therefore are inventoriable as an asset.
b. fixed production costs should be capitalized as an asset and amortized over future periods when benefits from such costs are expected to be received.
c. fixed production costs should be charged to the period in which they are incurred unless sales do not equal production in which case any difference should be capitalized as an asset and amortized over future periods.
d. fixed production costs should be charged to the period in which they are incurred.
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