Question

question 27 which of the following is true of absorption costing? a it assigns only variable manufacturing costs to the product. b none of these are correct. c it assigns all manufacturing costs to the product. d it is used only for internal reporting.

Explanation:

• Option A: Absorption costing includes both variable and fixed manufacturing costs, not only variable. So A is incorrect.
• Option C: Absorption costing assigns all manufacturing costs (variable and fixed) to the product. This is the definition of absorption costing.
• Option D: Absorption costing is used for external reporting (e.g., GAAP - compliant financial statements), not only internal. So D is incorrect.

Answer:

C. It assigns all manufacturing costs to the product.