the underlying differnce between absorption costing and variable costing lies in the treatment of A. prime costs B. variable manufacturing overhead c. fixed manufacturing overhead d. fixed non-manufacturing overhead e. all the above

the underlying differnce between absorption costing and variable costing lies in the treatment of A. prime costs B. variable manufacturing overhead c. fixed manufacturing overhead d. fixed non-manufacturing overhead e. all the above

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 3MC: Which is not a step in analyzing the cost driver for manufacturing overhead? A. Identify the cost B....

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Question

the underlying differnce between absorption costing and variable costing lies in the treatment of

A. prime costs

B. variable manufacturing overhead

c. fixed manufacturing overhead

d. fixed non-manufacturing overhead

e. all the above

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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