Question

Which of the following would not be considered to be a period cost on an absorption...

Which of the following would not be considered to be a period cost on an absorption costing income statement?

Both variable and fixed manufacturing overhead costs.

Fixed marketing and sales costs.

Administration costs.

Variable marketing and sales costs.
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Answer #1

Both variable and fixed manufacturing overhead costs

Period costs are those that are not added to the product cost and are expensed in the period they incurred. Under absorption costing, variable and fixed manufacturing overhead costs are included in the product cost and any leftover cost is carried forward to the next period.

Therefore Both variable and fixed manufacturing overhead costs would not be considered to be a period cost on an absorption costing income statement

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