Question

13. In throughput costing, direct labor and variable overhead are treated as

a. measures of capacity

b. fixed costs

c. period costs

d. product costs

Answer 1

Solution:

In throughput costing, direct labor and variable overhead are treated as

Answer c. period costs

Explanation: Under throughput costing, all costs are treated as period cost except for direct materials cost which are treated as inventory cost. It is also known as super-variable costing where the variable cost is only direct material cost, rest all costs are treated as period costs. Thus, Direct Labor and Variable Overheads are period costs under throughput costing.