Which of the following costs would be included in the cost of a manufactured product according to...

Question

Which of the following costs would be included in the cost of a manufactured product according to the variable costing concept?
(a) Rent on factory building,
(b) Direct materials,
(c) Property taxes on factory building,
(d) Electricity purchased to operate factory equipment,
(e) Salary of factory supervisor,
(f) Depreciation on factory building,
(g) Direct labor?

David · Accepted Answer

SOLUTION 
Which of the following costs would be included in the cost of a manufactured product according 
to the variable costing concept? 
(a) Rent on factory building Not to be included Fixed Factory / Manufacturing overhead 
(b) Direct materials Will be included Direct Material 
(c) Property taxes on factory building Not to be included Fixed Factory / Manufacturing overhead 
(d) 
Electricity purchased to operate 
factory equipment 
Will be included 
Variable Factory / Manufacturing 
overhead 
(e) Salary of factory supervisor Not to be included Fixed Factory / Manufacturing overhead 
(f) Depreciation on factory building Not to be included Fixed Factory / Manufacturing overhead 
(g) Direct labor Will be included Direct Labor
Under Variable Costing (also known as Direct Costing) concept,

Which of the following costs would be included in the cost of a manufactured product according to the variable costing concept? (a) Rent on factory building, (b) Direct materials, (c) Property taxes...

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