In marginal costing, which costs are treated as period costs?
Practice Questions
1 question
Q1
In marginal costing, which costs are treated as period costs?
Fixed manufacturing costs
Variable manufacturing costs
Direct materials costs
Direct labor costs
In marginal costing, fixed manufacturing costs are treated as period costs and not included in product costs.
Questions & Step-by-step Solutions
1 item
Q
Q: In marginal costing, which costs are treated as period costs?
Solution: In marginal costing, fixed manufacturing costs are treated as period costs and not included in product costs.
Steps: 5
Step 1: Understand what marginal costing is. It is a method of costing that only considers variable costs for product costing.
Step 2: Identify the types of costs involved in production. These include variable costs (like materials and labor) and fixed costs (like rent and salaries).
Step 3: Recognize that in marginal costing, only variable costs are included in the cost of products.
Step 4: Learn that fixed manufacturing costs are not included in product costs. Instead, they are treated as period costs.
Step 5: Understand that period costs are expenses that are charged in the period they are incurred, rather than being tied to specific products.
