Answer (A) is correct . Throughput costing, also called supervariable costing, recognizes only direct materials costs as being truly variable and thus relevant to the calculation of throughput margin.
Answer (B) is incorrect because Under throughput costing, direct labor is considered fixed because of labor contracts and employment levels.
Answer (C) is incorrect because Under throughput costing, overhead is considered fixed in the short run.
Answer (D) is incorrect because Under throughput costing, only direct materials costs are considered variable in the short run.
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