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A Basic Concept of Variable Costing Is That Period Costs

Question 29

Multiple Choice

A basic concept of variable costing is that period costs should be currently expensed.What is the rationale behind this procedure?


A) Period costs are uncontrollable and should not be charged to a specific product.
B) Period costs are generally immaterial in amount and the cost of assigning the amounts to specific products would outweigh the benefits.
C) Allocation of period costs is arbitrary at best and could lead to erroneous decision by management.
D) Because period costs will occur whether production occurs,it is improper to allocate these costs to production and defer a current cost of doing business.

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