Which of the following are considered to be product costs under absorption costi

Question

Which of the following are considered to be product costs under absorption costing? I. Variable manufacturing overhead. II. Fixed manufacturing overhead. III. Selling and administrative expenses. A. I, II, and III. B. I and II. C. I and III. D. I. Net operating income reported under absorption costing will exceed net operating income reported under variable costing for a given period if: A. production equals sales for that period. B. production exceeds sales for that period. C. sales exceed production for that period. D. the variable manufacturing overhead exceeds the fixed manufacturing overhead.

Explanation / Answer

Answer: B. I and II

Because under absorption costing fixed manufacturing overhead is also included.

Answer: B Production exceeds sales for that period.

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