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Hello,
I am using Becker and have been running into issues with inconsistencies in how they treat variable SG&A costs under the contribution approach. For instance, this is a homework question:
Using the variable costing method, which of the following costs are assigned to inventory?
Variable SG&A. Variable Factory OH
Yes. No
No. Yes
Yes. Yes
No. NoThe answer is the second choice and their explanation is:
Under variable costing, only the variable manufacturing costs (direct material, direct labor, variable overhead) are assigned to inventory.However an example in the book on page B2-5 shows variable selling and admin as a figure used when determining contribution margin.
Am I overlooking something very obvious?
I sit for my exam on Friday and would love help or advice.
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