Question

Absorption Costing: When production equals sales, what percent of fixed manufacturing costs are expensed?

Answer 1

In absorption costing, 100% of fixed manufacturing costs are expensed when production equals sales.

Step-by-step explanation:

In absorption costing, fixed manufacturing costs are expensed when production equals sales. This means that 100% of the fixed manufacturing costs are expensed. Absorption costing includes both fixed and variable manufacturing costs in the cost of producing each unit. The fixed manufacturing costs are spread out over the units produced, so when production equals sales, all the fixed costs are expensed.