Answer (C) is correct . Absorption (full) costing considers all manufacturing costs to be inventoriable as product costs. These costs include variable and fixed manufacturing costs, whether direct or indirect. The alternative to absorption is known as variable (direct) costing.
Answer (A) is incorrect because Variable (direct) costing does not inventory fixed overhead.
Answer (B) is incorrect because Variable (direct) costing does not inventory fixed overhead.
Answer (D) is incorrect because Conversion costs include direct labor and overhead but not direct materials.
|
