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30 November, 20:58

In absorption costing, nonmanufacturing costs are assigned to units of product. True or False True False

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  1. 30 November, 21:19
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    The statement is: False.

    Explanation:

    Non-manufacturing costs are those not related to the production process of the company. It implies costs useful for the operations of the firm but does not have an impact on the process of creating a final good. Administrative salaries, office supplies, and depreciation fall into this category.

    Absorption costing describes an accounting approach in which all the manufacturing costs are assigned to the units produced.

    Thus, as non-manufacturing costs are not related to the manufacturing process, they cannot be allocated within the units of production using the absorption costing method.
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