Marquez, Inc

Multiple Choice

Marquez, Inc.noted that its sales volume was less than its production volume for the month of March.Which one of the following is correct when comparing absorption costing and variable costing?

A) With variable costing, fixed manufacturing overhead is fully expensed on the income statement in the period the units are sold.
B) With absorption costing, a portion of the fixed manufacturing overhead incurred is included in inventory cost.
C) Variable costing requires that a portion of the fixed manufacturing overhead cost be reported as inventory cost on the balance sheet.
D) Absorption costing requires that fixed manufacturing overhead cost be allocated to all units produced using the number of units sold as the cost driver.