COST ACCOUNTING
VARIABLE COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The absorption costing method includes inventory:Fixed Factory Overhead and Variable Factory overhead
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No; No
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No; Yes
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Yes; Yes
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Yes; No
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Explanation:
Detailed explanation-1: -Absorption costing allocates fixed overhead costs to a product whether or not it was sold in the period. This type of costing method means that more cost is included in the ending inventory, which is carried over into the next period as an asset on the balance sheet.
Detailed explanation-2: -Absorption costing involves allocating all of the direct costs associated with manufacturing a product to COGS. This includes any variable costs directly associated with manufacturing, such as: Cost of raw materials. Hourly cost of labor.
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