BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Absorption costing is a system used in valuing inventory, which considers the cost of materials and labor, and also the variable and fixed manufacturing overheads. It is possible to use Activity-based costing (ABC) to allocate production overheads within the application of absorption costing.

Detailed explanation-2: -In addition to the fixed manufacturing overhead costs, absorption costing also includes the variable manufacturing costs in the cost of a product. These costs are directly traceable to a specific product and include direct materials, direct labor, and variable overhead.

Detailed explanation-3: -Correct answer: Option c. both variable and fixed manufacturing costs are considered product costs. Explanation: Under absorption costing, the variable manufacturing costs and the fixed manufacturing overhead are considered as product costs.

Detailed explanation-4: -Absorption costing is a costing system that is used in valuing inventory. It not only includes the cost of materials and labor, but also both variable and fixed manufacturing overhead costs.