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Managerial Accounting

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Treatment of Costs Absorption Costing

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Costs can be classified as product or non-product, fixed or variable, direct or indirect, and capitalized or period costs. Under the absorption method, which of the following are correctly classified?

A

Variable marketing costs are non-product indirect costs.

B

Direct manufacturing costs are a variable period cost.

C

Fixed manufacturing costs are an indirect product cost.

D

Variable manufacturing overhead is a direct product cost.