Question

Under absorption costing, which of the following statements is not true? Multiple Choice Fixed inventory costs are treated in the same manner as they are under variable costing. Over production and inventory buildup can occur because of how managers are evaluated and rewarded. All manufacturing costs are assigned to products. The fixed costs per unit decline as more units are produced. Variable inventory costs are treated in the same manner as they are under variable costing.

Answer 1

Answer:

Fixed inventory costs are treated in the same manner as they are under variable costing.

Explanation:

As we know that

The variable costing includes all the variable cost i.e direct material cost, direct labor cost and variable manufacturing overhead cost

While on the other hand the absorption costing is the costing in which all the cost i.e fixed cost and the irascible cost are considered

So the first option is not true as it should not be treated in the same way under both costing methods