Question

All of the following costs are included in inventory under absorption costing except: Select one: A....

All of the following costs are included in inventory under absorption costing except:

Select one:

A. Direct materials

B. Fixed manufacturing expenses

C. Variable selling expenses

D. Direct labor

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Homework Answers

Answer #1

C) Variable Selling Expenses

Reason: Costs are included in inventory under absorption costing includes

a) Direct Materials

b) Direct Labour

c) Variable Manufacturing Overhead

d) Fixed Manufacturing Overhead

Therefore, Variable Selling Expenses are to be charged to expense in the period in which they are incurred , rather than assigning them to Inventory cost, since these expenses are not related to goods produced, but to the period in which they were incurred.

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