The reporting method that includes in the cost of inventory (and cost of goods sold) all product costs, including both fixed and variable costs is known as:

Question

Izabella Baxter

Business

1 February, 13:40

The reporting method that includes in the cost of inventory (and cost of goods sold) all product costs, including both fixed and variable costs is known as:

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Answers (1)

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Brittany Brewer · Answer 1

The answer is absorption costing.

Explanation:

This method is used to indicate that all costs have been absorbed by the units produced, and includes the following costs (fixed and variable):

1. Direct labor.

2. Direct materials.

3. Fixed manufacturing overhead.

4. Variable manufacturing overhead.