What is the difference between full absorption costing and vanable costing? In f

Question

What is the difference between full absorption costing and vanable costing? In full absorption costin ted manufacturing overhead is expensed in variable costin fixed manufacturing ove need is nci ded in the cost o the product O In full absorption costing,all of the non-manufacturing costs are expensed In variable costing. all of the non-manufacturing expenses are indluded in the cost of the product O Variable costing must be used for external financial reports white full absorption costing cen only be used for internal reporting O In full absorption costing, fixed manufecturing overhead is included in the cost of the product. In veriable costing, fixed manufacturing overheed is expensed

Explanation / Answer

Basic difference in variable costing anf abosrption costing is due to fixed cost . In Variable costing we cannot take fixed cost in manufacturing expenses and in the abosrption costing fixed cost is taken in cost of production.

So Answer = Option 4 = In full absorption costing fixed manufacturing overhead is included in the cost of the product , in variable costing , fixed manufacturing overhead is expensed

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