8-3 The term direct costing is a misnomer. Variable costing is a better term for this product-costing method. Under variable costing, the variable costs of direct material, direct labor, and variable overhead are treated as product costs.
Selling and administrative expenses are treated as period costs under both variable costing and absorption costing. Selling and administrative expenses are never treated as product costs under either costing method. F 3.
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8-3 The term direct costing is a misnomer. Variable costing is a better term for this product-costing method. Under variable costing, the variable costs of direct material, direct labor, and variable overhead are treated as product costs.
Selling and administrative expenses are treated as period costs under both variable costing and absorption costing. Selling and administrative expenses are never treated as product costs under either costing method. F 3.