Asked by Rimiya Sharma on May 25, 2024
Verified
________ costing treats fixed overhead as a period cost.
Absorption Costing
A method of accounting for costs in which all costs of manufacturing a product, including fixed and variable overheads, are absorbed by the products produced.
Fixed Overhead
Regular, ongoing costs incurred by a business that do not vary with production levels, such as rent, salaries, and insurance.
Period Cost
A financial term referring to costs that are not directly tied to the production process and are expensed in the period in which they are incurred.
- Comprehend the treatment of fixed overhead costs in both costing methods.
Verified Answer
AN
Learning Objectives
- Comprehend the treatment of fixed overhead costs in both costing methods.