Question

Under variable costing, ______________ costs are considered product costs.

		variable manufacturing overhead
		fixed manufacturing overhead
		fixed selling and administrative
		property tax on the administrative office

Answer 1

Under variable costing, product cost includes all the variable cost that are related to the manufacturing. Variable manufacturing cost are direct labor, direct materials, variable manufacturing overhead.

Fixed manufacturing overhead, fixed selling and administrative and property tax on the administrative office are the period costs under variable costing. Period costs are those costs that are not directly related to the production process.

Variable manufacturing overhead is the correct answer.