Question

Under variable costing, which of the following costs would be included in finished goods inventory? a.salary of vice president of finance b.salary of salesperson c.straight-line depreciation on factory equipment d.wages of carpenters in a furniture factory

Answer 1

Answer:

d.wages of carpenters in a furniture factory

Explanation:

Under variable cost, the following cost is needed to be covered

1. Direct material  

2. Direct labor

3. Staff wages  

4. Freight out charges

5. Commission etc.

The salary of vice president, salesperson and the depreciation on factory equipment would not be considered as a variable cost because they covered under the fixed cost