A portion of the total fixed manufacturing overhead cost inc

A portion of the total fixed manufacturing overhead cost incurred during a period may:

be excluded from cost of goods sold under absorption costing.

never be excluded from cost of goods sold under variable costing.

never be excluded from cost of goods sold under absorption costing.

be charged as a period cost with the remainder deferred under variable costing.

Solution

Option A is the answer

Under absorption costing, Cost of Goods Sold may not include total fixed manufacturing overhead cost. Expenses like Selling expenses, sales commissions are not included while calculating cost of goods sold. They are charged to revenue instead.